MOSCOW: Something surprising has happened to the Russian economy. Last August, Russia experienced financial collapse, defaulting on treasury bills as its stock market plunged 94% from its October 1997 peak. The ruble was devalued to one quarter of its prior value. Half of Russia's banks closed, and many Russians lost their savings, while living standards fell by some 30%. In September, inflation skyrocketed to 38% a month, and industrial production plummeted by 15%. Russia seemed in an economic free-fall. Both GDP and industrial production fell by 5% in 1998, and the IMF forecast a further decline in GDP of 9% in 1999.
MOSCOW: Something surprising has happened to the Russian economy. Last August, Russia experienced financial collapse, defaulting on treasury bills as its stock market plunged 94% from its October 1997 peak. The ruble was devalued to one quarter of its prior value. Half of Russia's banks closed, and many Russians lost their savings, while living standards fell by some 30%. In September, inflation skyrocketed to 38% a month, and industrial production plummeted by 15%. Russia seemed in an economic free-fall. Both GDP and industrial production fell by 5% in 1998, and the IMF forecast a further decline in GDP of 9% in 1999.