President Vladimir Putin warned on Monday that the world economy was in crisis and its consequences risked hurting Russia's performance just as the global slowdown did in 2008-2009. Putin ordered Prime Minister Dmitry Medvedev to convene a special meeting of Kremlin and government advisers to come up with a response to a warning that Russia was nearing recession.
The Kremlin chief sternly cautioned that "the global crisis is obtaining ever more dangerous contours that will inevitably impact us, too." "This happened in 2008 and this is what we are witnessing today," Putin said. Russia's economy contracted by nearly 10 percent in 2009 in the immediate aftermath of the global financial and economic crisis that began the previous year.
The country's banks then betrayed their exposure to dollar-denominated foreign loans that soared in value with the accompanying drop in the global price of oil and collapse in the value of the ruble. Russia's economy was saved from outright ruin thanks to tens of billions of dollars that the government quickly infused into the frozen banking sector and invested in badly struggling industries.
But the economic recovery that followed was slow and peaked at just half the rate of the nearly eight percent growth recorded prior to the crisis. The economy today is slipping back from even those modest rates following a disappointing 2012 in which growth came in at a modest 3.4 percent. The economic ministry last week slashed Russia's growth forecast for this year to 2.4 from 3.6 percent amid a slowdown in both industrial output and consumer demand.