NEWSWATCH Wall Street Journal: The Putin Recession; Russia’s economy keeps shrinking, but the West won’t take advantage
The Wall Street Journal editors address Russia’s economic crisis and the West’s apparent unwillingness to step up economic pressure.
The Russian recession is expected to continue unfolding.
An oddity of recent weeks has been the attempt to argue that Russia’s economy isn’t as awful as it looks. Then along comes Friday’s report that GDP fell 1.9% year-on-year in the first quarter.
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… negative growth … means a shrinking economy. … The European Bank for Reconstruction and Development on Thursday predicted a decline of 4.5% this year, with a recession stretching into 2016.
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… Consumer spending is collapsing as wages fall and inflation sets in. Whatever trade boost the Kremlin thinks it’s getting from the weaker ruble, the trade deficit is shrinking mainly because imports have declined much faster than exports. Western sanctions continue to dent investment.
Putin-centered problems made the Russian economy more vulnerable to sanctions, yet the West does not seem willing to apply as much pressure as it might.
… the real story is that Russia continues to grapple with the longer-term crisis of Vladimir Putin’s economic mismanagement: endemic cronyism and corruption, hostility to foreign investors, overreliance on commodities, the absence of a meaningful rule of law, and more. Mr. Putin and his regime continue to be vulnerable to economic pressure, but the best news for him is that the West lacks the will to apply it.