Putin Hits a Bad Patch

Summary:

At the turn of the year, Putin had celebrated 20 years in power, and faced no serious domestic opposition. Russia had achieved macro-economic stability, with inflation at 3 per cent (even if living standards for ordinary Russians had hardly risen in a decade). Oil prices, at around $60 per barrel, were high enough to boost Russia’s already sizeable sovereign wealth fund. The US and EU were internally divided and pre-occupied with their own problems; and he had developed a strong relationship with President Xi Jinping of China, the leader of the rising superpower. Then the oil price collapsed and the COVID-19 pandemic gripped Russia. Those two developments in combination led to a sharp contraction in GDP. The rest of 2020 would be very challenging for Putin and this would have implications for the West.

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