Russia's fragile recovery could be threatened by the bursting of dangerous bubbles in the global economy, economists warn.
Central among these concerns is that Chinese growth, fuelled mainly by government spending, could collapse, the World Bank said in a report released last week.
"[The Chinese] are taking tentative steps to control their budget by forcing banks to curtail lending, and they had previously talked about putting caps on industrial capacity to slow it down because you have all the characteristics of a bubble developing," said Chris Weafer, chief strategist at Uralsib.
China could be the most vulnerable economy, despite being the success story of the crisis and propping up the world with cheap exports, demand for natural resources and GDP growth of 8.7 per cent last year.
Russia - thanks to its reserves and stabilisation fund - is likely to be immune from many symptoms of a double-dip crisis, but if demand does fall, Russia could be hit hard by collapsing commodity prices.
China's boom has had a positive knock-on effect in commodities-dominated Russia, which was boosted by rises in the oil price and commodities market last year.
Oil prices shot up from lows of $30 to around $80 in 2009, propping up the Russian economy and line the government's coffers but signs that the recession isn't over could send the price of oil spiralling.
"The oil forecasts are based on the view that the global economy is going to get back to the growth rates we saw midway through last decade and we simply don't think that is the case," said Neil Shearing, an economist at London-based Capital Economics.
Following the scare in Dubai and concerns about Greece's sovereign debt, emerging markets have looked most at risk, but developed economies are also facing the same demon.
The US budget deficit hit $1.4 trillion, or 11.2 per cent of GDP, in 2009 and governments are going to have to start lowering the debt burden as they emerge from the crisis, according to some economists.
Influential US economist Nouriel Roubini, who accurately predicted in advance the financial crisis of 2008, has warned that prolonged fiscal deficits could put a "chokehold on growth".
"Right now we have prevented too much slowing down [with fiscal spending] but in future this will keep recovery rates low and they could be low, even if the government has no debt," said Vladimir Bragin, chief economist at Trust Bank.
Like Greece, which is facing demands to cut budget spending, other countries in the EU are going to be forced into a no-win situation of either raising taxes or cutting spending."There is no chance of avoiding this process because if stimulus is withdrawn now, it will slow down the economy even further," said Bragin.
Europe has shown how dependent some sectors are on government stimulus after the German government withdrew its "cash-for-clunkers" scheme, causing sales across Europe to drop off rapidly."We saw this huge surge in exports, 50 per cent of which was in the vehicles sector, and that was almost exclusively owed to clash for clunkers," said Shearing.
Russia does not have the same problem as many other countries, having not borrowed externally to finance its deficit of 5.9 per cent of GDP, and could potentially spend its stabilisation fund on stimulus packages."There is little pressure to reign in fiscal policy but [Finance Minister Alexei] Kudrin seems hell-bent on it and that will be to the detriment of growth," said Shearing.
Kudrin's tough stance on the budget deficit, along with his claim that the RTS was overvalued following its 129 per cent gain last year, demonstrates his concern that the stock market is bubbling over before real economic growth returns.
Investors, however, still see Moscow's bourses as cheap compared to other markets, with 2010 price-to-earnings ratios still below 10.
"I don't agree with some of the concerns that the stock market has risen so fast it is causing a bubble, because people are looking at ... what happened in 2009 and not 2008," said Weafer.
Meanwhile, Russia's real economy remains in the doldrums. Key indicators such as GDP and property prices are not yet recovering, although the decline has been halted.
Risks remain to Russia if a second dip occurs worldwide, as earnings will slide and investors will look for safety in the dollar, taking their money away from Russia's risky assets.
"While the overall market and the economy are not showing characteristics of a bubble, the companies that have shown that pace of price appreciation on the back of the Chinese bubble are more at risk than the rest of the market," said Weafer.