by Wolf Richter
What do they see that we don’t?
Russia’s economy has been shrinking five quarters in a row, though in the first quarter of 2016, it contracted at an annual rate of “only” 1.2%, after having contracted 3.7% in 2015, the longest recession in two decades. The budget deficit has swollen to 8.6% of GDP in April – way beyond the 3% the government is projecting for the year. It might require additional and unpopular budget cuts.
So the jump in oil prices recently, while not nearly enough, is a huge economic relief for the world’s largest oil & gas exporter.