I haven't analysed the Russian economy in detail for quite a long time, but given its importance, I've been looking at it again more closely. I've revitalised my Russian coinciding index, which has a good relationship with real GDP, but is monthly and more up to date. A coinciding index is so called because it is designed to coincide with the business cycle.
Notice how closely correlated the oil price is to economic activity, except recently, when the war caused a downturn out of sync with the behaviour of the oil price. Now, the thing is, Russia isn't getting the global oil price, because of sanctions. The Urals oil price is just $52, compared with Brent at $78, and it's more than halved since March 2022, whereas Brent has only fallen 40%.
Many indicators show a rebound from the post-invasion lows. But I am convinced that this is temporary, and that the inexorable dynamic of falling oil output (because of sanctions), and a plunging price (because of deepening global slowdown) will drive Russia into a deep recession. Russian overtures for peace are likely to become more frantic as this dynamic works out.
I'll keep you posted.
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