The fall in oil prices over the past month poses another headwind for Russia’s struggling economy. The drop in prices is unlikely to have a major bearing on the outlook for the rest of this year – although it does limit the scope for fiscal stimulus to support growth. A bigger concern, however, would be if oil prices fall further from here and then stay low for a prolonged period. We think this is a realistic possibility and is a key reason why we expect growth to remain extremely weak over the coming years.
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