In January, Prime Minister Dmitry Medvedev set a goal of 5 percent growth for the Russian economy, one of the central promises of Vladimir Putin’s campaign — but not only is that proving to be too wildly optimistic a target; now they’re scrambling just to avoid recession. No neighboring economy is safe, it seems, from the ravages of the all-destabilizing and never-ending European debt crisis. Says their economic minister:

“We are not in recession for now, but we may get there – there is such a risk,” Mr Belousov told reporters during a trip to eastern Siberia. “I think that, if by autumn we don’t see growth for some period, we may slide into recession.”

The announcement comes a day after his ministry slashed its projection for economic growth in 2013 by a third, from 3.6 per cent to 2.4 per cent. Growth in the first quarter was likely to have reached about 1 per cent, compared with a year ago, which would mark the fifth-consecutive quarter of slower growth. …

The slower first-quarter growth was mainly the result of a combination of low industrial production, consumer spending, and investment, said economy ministry officials.

But of course, let’s not dismiss the fact that Russia has more than their fair share of systemic economic problems to complicate matters:

The government is considering boosting spending on much-needed road, rail and other infrastructure projects, but after several years of sharp spending increases, the budget is already under pressure.

“Russia faces the challenge of increasing the competitiveness of its economy if it wants to increase GDP growth on a sustainable basis to at least 4%,” said Alexander Morozov, chief economist at HSBC Bank in Moscow.

He noted that the challenge “is particularly difficult for Russia, where state-controlled companies dominate the economy and face little competition.” He noted that small and medium enterprises “generate only a small share of GDP and suffer more than large companies from various administrative barriers to their business expansion.”

And while it certainly does benefit the larger global economy, it doesn’t help their situation that their stronghold on the regional natural gas market is getting a little healthy competition from the shale boom going down in the US of A:

Russia’s oil exports could plunge in the coming decades as the U.S. ramps up output of shale oil, a group of government-linked experts said, in an unusually frank admission that the North American energy boom poses a threat to Russia’s hydrocarbon-fueled economy.

Russia, the world’s largest energy producer, is already seeing its natural-gas exports shrink, partly as a result of the U.S. shale-gas boom. Government officials have raised concerns in recent months that dwindling gas exports are holding back economic growth and costing the government billions of dollars in lost revenue.

Russia relies on oil and gas revenues for about half of their federal budget, and while their state-controlled industries have faced very little competition, the reckoning of the global economy is finally starting to catch up with them. All the better reason for us to start LNG-exporting more, no?