As the global recession deepened last winter, Russia spent about $200 billion, or a third of its precrisis foreign currency reserves, defending the ruble during a gradual devaluation. This spring the tables quietly turned as oil prices rose, and the Russian Central Bank has made back about $30 billion since March by intervening to prevent the ruble from appreciating, the report said.
Yet other factors are weighing on Russia's prospects, the World Bank report said. A swoon in domestic demand, worse-than-expected global growth, tight credit and declining infrastructure investment are taking a toll, it said.
The report did note some signs of recovery in Russia's economy, including earnings for companies and the budget from the higher oil prices.
Still, because of the worsening outlook, millions of Russians will slip back into poverty, the bank predicted. The percentage of the population living in poverty, which had been on the decline for the last decade as Russia seemed to put its post-Soviet economic woes behind it, will rise again. The bank projected Russia would end the year with 17.4 percent of the population, or about 24.6 million people, living in poverty.
Russian policy makers, the report said, would increasingly find themselves performing a "balancing act" of maintaining macro-economic stability while meeting growing demands for social spending as poverty spreads.
