Inflation has been kept in check and may remain below the projected 18 percent this year. Refinancing rates have come down sharply and could decline to 20 percent by the end of the year, which would facilitate investment in the real economy, the launch of a nationwide home mortgage scheme, and other welcome and overdue activities. The exchange rate has stabilized around 28 rubles to the dollar. These hopeful signs must be set against the dismal context of the Russian economy and society today. Domestic investment is one-fifth of the 1991 level.
Environmental disruption is acute and mitigated only by the vast size of the country.
Putin has rightly warned his countrymen not to expect miracles. The chaotic and corrupt mess that is the Russian economy cannot be cleaned up overnight. Inheriting a window of opportunity, he will have a chance to start turning the Russian economy around so that it will begin to recover from what was perhaps the greatest misallocation of resources in any major economy during the Twentieth Century.