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Will government directives cure ailing Russia’s economy?

Will government directives cure ailing Russia’s economy?

Russia’s Prime Minister Dmitry Medvedev decided to adopt radical measures to revive the ailing domestic economy. Over the recent 20 years, Russia’s economy which ranks 6th largest global economy has been underperforming despite its enormous capacity. Interestingly, the economy used to surprise the world community with robust economic metrics, but the winning streak did not last for long. Russia’s authorities deny the fact of recession in 2019, though the economy is evidently facing a slowdown. The Bank of Russia has downgraded the 2019 outlook for economic growth to 0.8%-1.3% from an earlier forecast of 1.0%-1.5%. Nevertheless, the Kremlin irritates the Russian nationals with optimistic assessments of the economic conditions. Russia’s government agencies even detected evidence that the economy had gained momentum in Q3 2019. The head of the cabinet issued directives to prop up economic growth. The Premier assigned the Commission on economic development to implementing the package of measures which should spur GDP growth to at least 3% from 2021. Such measures aim to improve business climate, boost domestic demand, increase fiscal stimulus, encourage healthy performance of the private sector, and ensure strict supervision over the government investment programs. It sounds good on paper, but the Kremlin’s ambitions have been always focused on foreign policy at the expense of the national welfare.                          


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