The Economy of Russia
The 1998 Default and Recovery
Russia defaulted on its debt in 1998 and devalued the rouble, then recovered strongly as oil prices rose in the 2000s.
A crisis set the stage for recovery.
1998 crisis
Falling oil prices and high debt led Russia to default on its rouble debt and devalue.
Rebound
A cheaper rouble helped domestic producers, and rising oil prices boosted revenue.
Growth
The economy grew quickly through the early 2000s.
Stabilisation
The government built reserves and reduced debt.
A cheaper rouble
After devaluation, imports became costly, and local producers gained market share.
Attributing recovery only to oil
Devaluation and policy also mattered.
Key takeaways
- Russia defaulted in 1998.
- The rouble was devalued.
- Oil prices lifted revenue.
- Reserves were built.
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