Vladimir Putin has been sworn in for a third term as Russian president. He took over the power mantle from Dmitry Medvedev at a state ceremony at the Kremlinon Monday.
But analysts said Putin will not get such an easy ride this time round.
Much of Russia’s boom in his last two terms was built on a huge rise in oil and gas prices. The industry accounted for around half the country’s budget revenue. However future forecasts suggest stagnation in the sector and very little else to make up for it.
“We’ve heard about diversification ever since Putin first came to power,” says Maria Lipman, an analyst at the Moscow Carnegie Centre. “However, Russia’s economy is even more dependent on oil on in this the twelfth year of his leadership, than it used to be at the beginning.”
Years of high annual economic growth saw the Russian stock market soar more than 1,000 percent. But the outlook on oil prices combined with the eurozone crisis and street protests in Russia have made investors nervous.
Economists forecast GDP growth of 3.65 percent this year – still relatively healthy but only half the annual rate of the past decade.