The fall in oil prices over the past month or so poses another headwind for Russia’s struggling economy. The drop in prices so far is unlikely to have a major bearing on the immediate outlook – although it does limit the scope for major fiscal stimulus to support growth. A bigger concern, however, would be if oil prices now stay low for a prolonged period. At best, the economy is likely to stagnate. At worst, it could face a crisis in as little as two years.
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