The outlook is far from rosy and no one is cheering, particularly not before the G-7 meeting in Tokyo next week, when Western leaders will be looking for excuses to trim earlier aid commitments to Russia. However, after two winters of near-apocalyptic gloom over the consequences of President Boris Yeltsin's reforms, fears of mass starvation, social turmoil and economic ruin have faded. The worst may finally be over.
The risk of hyperinflation, which President Yeltsin warned last autumn could derail reform entirely, has now receded; a freefall in industrial production, which has slashed output by about a quarter over the past year alone, has been broken; and - though it may prove no more than a seasonal fluke - the rouble is holding its ground against the dollar after losing half its value in six months.
A Deputy Prime Minister, Boris Fedorov, predicted yesterday that inflation would soon fall below 15 per cent a month - still very high but well below the 50 per cent level of hyperinflation and down from a monthly rate of 25 per cent at the beginning of the year. 'The acute crisis of the past year is finished,' said Alexander Livshits, an economics professor working in the Kremlin. 'It is a start, even if we still have lots of other crises to deal with.'
The change in mood is due to politics as much as any dramatic improvement in economic indicators. A national referendum in April endorsed both Mr Yeltsin's leadership and his economic policies and paved the way for what Mr Fedorov hailed as a 'historic' pact in May between the government and the Central Bank to limit credit.
'The referendum was the most important political event in Russia since the change of economic system was initiated at the end of 1991,' says Anders Aslund, director of the Stockholm Institute of East European Economics, in a recent report.
'The catastrophic scenarios of a Weimar Germany, disintegration, hyperinflation or a military coup are no longer plausible.'
The Central Bank governor, Viktor Gerashchenko, who reports to Russia's parliament instead of the president or the cabinet, had until the referendum refused to heed warnings that bailing out state factories with cheap credit was fuelling runaway inflation. And reluctant though his conversion to tight monetary policy might be, he has stuck by the terms of the May deal. Proof of this is his decision to raise the Central Bank's discount rate - the level at which it loans money to commercial banks - no less than four times to 140 per cent.
Also stable after months of wild oscillation is the market price for privatisation cheques, the 10,000-rouble chits issued to every Russian as part of a massive and now accelerating sale of state assets. The street price of these chits has no real bearing on Russia's real economic well-being but is important as a pyschological barometer.
Privatisation has been fraught with problems and, in many cases, has merely provided Communist-era factory managers and bureaucrats a chance to grab property and cash. But the programme is well on its way to accomplishing two important goals - enlisting support for free-market change and shattering the state's grip on the economy. By the end of April, 66,000 state companies had been privatised and, as the focus of the programme moves from small shops to massive combines, revenues from these sales have doubled.
Russian officials, though, are still anxious about raising hopes they cannot meet. Mr Yeltsin has already had to go on television to apologise for not delivering the better life he promised when he first took a sledgehammer to the state system by lifting price controls 18 months ago.
Mr Fedorov, whose job is to impose some order on Russia's zig-zagging economic reforms, yesterday offered this assessment of the government's admittedly modest achievements: 'Analysing the economic situation, we have arrived at the conclusion that on some some issues there is sufficient grounds for optimism.' Hardly the stuff to win elections but, after all the thunderous rhetoric of the past year from Mr Yeltsin and his rivals within the Congress of People's Deputies, it is a register that appeals in a country tired of bloated promises.
He also pleaded with Western government not to turn their back on Russia at this crucial juncture. Russia insists it does not want hand-outs, just a fair deal.
WASHINGTON - The IMF yesterday approved a dollars 1.5bn ( pounds 1bn) loan for Russia, Reuter reports. The loan is designed to help Russia stabilise its economy during the transition from communism to capitalism.