Russian economy has worst year since global financial crisis

Jackson also notes that the “unfavorable base effects” in Russia’s economy alone don’t seem to account for this significantly weaker data than analysts were expecting.

An extended period of economic woe raises the specter of a surge of public protests in Russia and the economic pain represents a significant blow to the prestige of President Vladimir Putin who has presided over a sustained period of rising living standards during his 16 years at the top of Russian politics. However, analysts said that the embattled country was nonetheless likely to remain in recession.

Khamzat Khasbulatov, chief executive of McDonald’s Russian Federation, said sanctions and the weak rouble had forced the USA company to make “serious adjustments” to its business model, but focusing on local suppliers and affordable menus had proved successful. Retail sales plunged by 10% and capital investment fell by 8.4% in the economy’s worst performance since 2009.

Prices fell even lower in January, with Brent trading near $31.30 per barrel today, less than $37.60 per barrel at the end of December. Russian Federation has been hit as well by the economic sanctions that were placed on the country by the USA and the European Union for how it entered Ukraine during the internal conflict of one of its former states.

Russia’s stock exchange dropped on Tuesday on the back of the latest slide in oil prices, as the Russian ruble continued its rollercoaster course. Some of the food products that increased the most in price past year include garlic (a 75.3 percent increase), peppercorns (a 65.6 percent increase) and oranges (a 47.6 percent increase). This figure appeared “optimistic”, he admitted last month. Last week the currency fell to its lowest level against the USA dollar since 1998, surpassing 85 roubles against the greenback.

The rouble has been the world’s second worst-performing emerging market currency in the past three months, only outperforming Argentina’s peso in the period, according to Bloomberg.

Elvira Nabiullina, the head of the central bank, said last week that authorities had “all the means” needed to keep the economy stable.