Though the latest data from Russia reveals that its economy has contracted by at least 1% YoY, Jamestown Foundation argues the overall picture is much worse than this. More detailed analysis by HSE ( the Moscow High School of Economics ) reveals that in April the economy contracted by 1.9% , retail sales declined, the construction sector plummeted by -5.8% and real disposable income fell. If the country’s economy declines over the course of this year, even by as little 1 percent, Russia will have officially experienced a “lost decade,” since its GDP will have grown smaller than it was in 2007—regardless of the statistical method used to arrive at these figures. The reasons for this are that Russian exports for January to April 2016 fell a staggering 31.3% YoY ; the state budget is well in the red, forcing more significant dips into national reserves; the investment climate rate is plummeting, and none of these current trends are expected to change. The Russian government is now considering significantly raising the VAT rate to 25% from as little as 1% . If the country’s economy declines over April , even by as little as 1% , Russia will have officially experienced a “lost decade”, and an ongoing downward trend will become long-term. Russia 's leadership has an unrealistic hope that some external event will take place to revitalise the nation's economy, and so is losing time instead of developing successful domestic policies.
Though the latest data from Russia reveals that its economy has contracted by at least 1% YoY, Jamestown Foundation argues the overall picture is much worse than this. More detailed analysis by HSE ( the Moscow High School of Economics ) reveals that in April the economy contracted by 1.9% , retail sales declined, the construction sector plummeted by -5.8% and real disposable income fell. The reasons for this are that Russian exports for January to April 2016 fell a staggering 31.3% YoY ; the state budget is well in the red, forcing more significant dips into national reserves; the investment climate rate is plummeting, and none of these current trends are expected to change. The Russian government is now considering significantly raising the VAT rate to 25% from as little as 1% . If the country’s economy declines over April , even by as little as 1% , Russia will have officially experienced a “lost decade”, and an ongoing downward trend will become long-term. Russia 's leadership has an unrealistic hope that some external event will take place to revitalise the nation's economy, and so is losing time instead of developing successful domestic policies.