While Russia's Finance Ministry had made an optimistic forecast for 2010, GDP in January 2009 showed an 8.8% decline on a year-on-year basis. Many experts believe that the Russian economy won't improve until the second half of 2009. The Minister of Finance, Alexey Kudrin, says that the recovery process will happen simultaneously with the improvements of the US economy, which is far from recovering at the moment. Kudrin estimated that in 2009 the Russian economy will contract by 2.2%.
The Russian government has allocating $15 billion to boost the capitalization of the banks, with the aim of supporting and stabilizing the banking sector. In February 2009, bad corporate loans increased by 20% in the country’s top 20 banks while defaults on retail loans were up by 10%.
In January-February 2009, consumer prices in Russia have risen by 4.1%, the inflation rate reached 1.7% in February along. On average, food price became 2% more expensive, but some products like sugar, fruit and vegetables increased by over 10% according to Rosstat. The Russia Presidential aide, Arkady Dvorkovich, says that the total rate of inflation for 2009 may exceed the previous forecasts of 13% by at least 1 or 2%. This could mean that Russia is likely to experience a period of stagflation, with the highest rate of inflation seen since 2002, when it reached 15%.
According to the Russia's Central Bank, even though prices are increasing and the value of the Rouble is down almost 30% since the beginning of the crisis, consumers, nevertheless went on a spending spree in January, which results in a spending increase of 5.8% compared to last year. The positive figures are however not interpreted in a positive light by financial experts who predict a decline of retail sector in the near future. Sectors with a high percentage of domestic production, like food, are expected to have a positive performance in 2009, whilst imported goods will decline. In January 2009 the imports of electronics and cars has already shrunk by 34%.