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The long-term sustainability of Russia's economy is an open question.One notable difference is that Russia's macroeconomic management is much more competent today than it was then.Since oil prices started falling in June 2014, Russia has slipped from sixth place to 14th in the International Monetary Fund's global economic rankings; its GDP (measured in current U.S. dollars) has dropped from $2.1 trillion to $1.1 trillion – just 6 percent of U.S. GDP. For Putin, all that matters is the total size of Russia's international reserves.Remarkably, the unemployment rate is currently 5.4 percent, and Russia has managed to keep it below 6 percent since the oil-price shock; what's more, public debt is a minuscule 13 percent of GDP.Real disposable incomes fell 10 percent last year, and will likely shrink by another 5-6 percent this year; investment fell more than 8 percent last year, and will likely fall by 4 percent this year; and GDP declined by 3.7 percent in 2015, and will probably contract this year as well (though by less than 1 percent).
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