Roubini: Putin’s return may lead to “lost decade,” continued emphasis on oil revenue to balance budget
NYU economics professor Nouriel Roubini is predicting that Russia faces a “lost decade” economically when Prime Minister Vladimir Putin returns to the presidency this spring.
Tai Adelaja reports in the Moscow News that Roubini, who met with Putin earlier this month, is highly concerned with the Russian economy’s continued reliance on commodities like oil and natural gas and with its leaders’ inability to do more than pay lip service to much needed institutional reforms.
London-based Capital Economics notes that even if Putin were to follow through with his campaign pledges, it would cost the Russian government more than $160 billion by the end of his next president term. That would raise the oil price that Russia needs to balance its federal budget from about $117 per barrel at present to $130 per barrel.
All this means that Russia is likely to fall behind its BRICS counterparts in development with Putin leading the nation, as he won’t be able to “shake the Russian economy out of its doldrums,” Roubini said.
Roubini believes that Putin’s ambitious plan to accelerate growth by 6 percent or 7 percent over the next 10 years is unrealistic. While efforts to intensify reforms could bring some economic effects, they are bound to stumble on problems like aging infrastructure and poor investment climate, he said.