Is Russia’s economy sinking or swimming?

Will Russia’s economy sink or survive? Source: ShutterStock/Legion Media

Will Russia’s economy sink or survive? Source: ShutterStock/Legion Media

Meanwhile, a story of Russian invasion becomes Norway’s biggest TV premiere ever, writes Aliya Sayakhova in her roundup of what Russian and UK media covered last week.

Inflation rates falling but so is economy

“Good News On Russia Economy” announced a Forbes headline last week. Good Russian news in the British media is rare as diamonds these days so the article could not but grasp attention.

Forbes announced a positive outlook for the Russian economy in the upcoming year and praised the efforts of Elvira Nabiullina, governor of the Bank of Russia and the world’s best central banker, according to Euro Money magazine.

Nabiullina has managed to keep the ruble sane in the past few months and is fighting a tough battle against double-digit inflation in the hope of cutting interest rates. Once interest rates cuts can be resumed, investors should be getting more interested in Russian stocks once again – and that could happen as soon as the second half of next year or earlier.

According to Barclays Capital, the inflation driven by the ruble’s dramatic depreciation should slow down from current whopping 15.7 percent down to 7 percent in 2016. 

Forbes echoes the Russian economic report published by the World Bank last week: “The policy response by the authorities successfully stabilized the economy,” said Birgit Hansl, World Bank Lead Economist for the Russian Federation and the main author of the report.

“Monetary policy prevented costly delays in relative price adjustments, highlighting the importance of the central bank’s commitment to inflation targeting in the context of a flexible exchange-rate regime,” reads the document.

However, even the continued efforts of the government and economists can not prevent the Russian economy from slipping into a downward spiral – these are merely attempts to cushion the blow. The continued impact of the lower oil prices, coupled with the ongoing sanctions against Russia over its role in the Ukraine conflict, will cause the economy to contract by an estimated 3.8 percent in 2015.

“The recession is having a severe impact on households as double-digit inflation erodes real wages and incomes,” states the report, projecting a sharp rise in poverty in Russia.

According to the Russian daily business newspaper RBK, the only type of business which is on the rise in the Russian economy these days is pawnshops: an alarming sign as pawnshop business traditionally thrives during crises, explains Moscow’s Higher School of Economics, which published the research findings.


Russian invasion premieres in Norway

On Sunday, Oct. 4 a new TV series called Occupied premiered in Norway, a film that could hardly be labeled as Russia-friendly.  

A thriller based on a story by Norwegian crime writer Jo Nesbø, Occupied imagines that an environmentalist government has come to power in Norway and ceased to supply Europe with North Sea oil, forcing the EU to call on Russia to come to its aid.

The plot is of course pure fantasy: If anything, Russia would have benefited from Norway stopping oil exports, but the scriptwriters hardly consulted Nabiullina prior to writing the screenplay.

The Russian embassy in Oslo condemned the TV series for scaring Norwegians with tales of “chimerical aggression coming from the East.” Yet many in Scandinavia believe the aggression is very real, explains British daily The Guardian. The global context has changed considerably since the series was first conceived two years ago­ – and only to the benefit of the film producers. Crimea and Ukraine have made the possibility of Russian aggression seemingly clear and present danger, says The Guardian.

As a result, the TV series has already proved an outstanding success with the audience. According to the Echo of Moscow radio station, the first episode was watched by 633,000 people, or 13 percent of the Norwegian population, making Occupied the most successful premiere in the history of Norwegian television.

All rights reserved by Rossiyskaya Gazeta.

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