To put things lightly, Russia’s economy had an awful 2015. Oil prices tumbled from their mid-2014 peak of over $100 barrel; this drop in oil hit Russia especially hard, as the country’s economy is heavily dependent on oil and gas exportation. GDP contracted by nearly 4%, while inflation ran close to 13%.

The rouble lost half its value against the U.S. dollar in the second half of 2014. It fell another 20 percent through 2015, before the substantial decline began to slow down. In an effort to signal confidence to the the country, and the world, that their economy was going to rebound, Vladimir Putin, Russia’s president, declared that “the peak of crisis” had passed.” If only it were that simple. 

The continued turbulence within the oil market has put raised serious doubts about any thoughts of a fast recovery to bed. According to the IMF, Russia’s GDP will likely contract again this year, by 1%.

Although things are looking bleak, lets not exaggerate the issue. Russia is unlikely to repeat the acute problems that lead to this economic turmoil. After all, Russia businesses have responded to these problems by building much healthier finances. Furthermore, the foreign debt has fallen by a third since 2014. 

While the private sector seems to have gotten their finances under control, the public sector still has some work to do. The government budget is assuming that oil averages a price of $50 a barrel. However, for every $5 that this estimate overestimates the price of oil for 2016, the budget deficit rises by roughly 1%. Let’s hope these estimates prove to be conservative. 

If Russia continues to run a budget deficit, this will likely force Putin to print more roubles, leading to more inflation. This would hit struggling Russian families hard, who have already seen a significant drop in their buying power and quality of life. 

For all intents and purposes, the dramatic phase of Russia’s economic purpose is behind it, as Putin has claimed. For ordinary Russian citizens, however, the second phase of the crisis will not seem much better.