Russia04 Jun 2014
Russia is still commonly referred to as one of the BRIC economies, along with Brazil, India and China. This grouping of the emerging, or newly advanced, economies with the capability of dominating the global economy in the 21st century remains a potent symbol of the shifting balance of economic power. However, the BRICs have all faced challenges recently, with Russia slipping back most.
Russia’s economy has suffered from considerable fluctuations in the first quarter of 2014, starting with currency problems, being one of several emerging markets whose currencies dramatically weakened, fuelled by concerns regarding US tapering of its quantitative easing programme. Initially, the decline of the ruble was less startling than other emerging market currencies, but the Crimean crisis has extended its downward run. Russia has experienced a relatively high degree of capital outflow in the last year or more, and the continuation of this, along with constrained access to foreign funding, will negatively affect the already stagnating economy.