Russia’s Dutch Syndrome

Abstract

The paper analyzes the trend of a significant strengthening of the Russian rouble in 2022 and similarities to the well-known Dutch disease. However, the causes of this trend are somewhat different, as in addition to high export earnings Russia’s financial isolation in the external and internal circuits played an important role resulting in plunging imports and the blocking of some channels for capital outflow. The analysis of the Russian variant of the Dutch disease that lasted less than 8 months concludes that the same scenario is unlikely to happen in the medium term.