Putin 4.0: The Great Stagnation

The outcome of Russia’s presidential election next month is not in doubt, although it’s still unclear what direction economic policy will take during President Putin’s fourth (and probably final) term. In this Focus, we argue that fiscal and monetary orthodoxy is here to stay, but the wholesale reforms needed to raise investment and ease the growing demographic squeeze won’t happen. Putin 4.0 is likely to be characterised by growth rates similar to those seen in the Brezhnev Stagnation – although the good news for bond investors is that this is likely to be accompanied by low rates of inflation.