Why Russia’s Economy May Be on Hold Ahead of Elections

Russia’s financial and political elite will descend on St. Petersburg this week for the country’s flagship economic summit at a time of heightened uncertainty for the world’s 10th-biggest economy.

The annual St. Petersburg International Economic Forum will take place from June 16-18, with Russian President Vladimir Putin speaking and around 10,000 participants expected. This year’s theme is “capitalizing on the new economic reality” — which for Russia is looking bleak.

The International Monetary Fund forecasts its economy will shrink by 1.8 percent in 2016, having contracted by 3.7 percent in 2015. Two of the reasons for the recession are well-known — the collapse in crude oil prices and the international sanctions levied in response to Russia’s incursion in Crimea. In addition, the country must also contend with legislative elections in September that may delay reforms needed to bring public finances into better order.

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Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.