Economy Sanctions, low oil prices hurt Russian economy: Medvedev

Sanctions, low oil prices hurt Russian economy: Medvedev


Russian Prime Minister Dmitry Medvedev
Russian Prime Minister Dmitry Medvedev

(AA) – The Russian economy has been seriously harmed by sanctions after the annexation of Crimea and the fall in oil prices, Russia’s Prime Minister has said.

Dmitry Medvedev told the lower house of Russia’s parliament, the State Duma, on Tuesday that a decrease in the value of ruble was the most significant outcome of sanctions and dropping oil prices.

“The rapid build-up in the ruble will limit the country’s export opportunities, so the Russian government wants to hold the ruble at a predictable level rather than see an extreme rise or fall in value,” he said.

He said the Russian economy had begun to adapt to the new conditions but a negative-biased curve in the economy would continue next year and the 2016 budget will not be easy.

But he said the Russian government should learn to work in negative economic conditions in order to weather sanctions.

Medvedev said the Russian Central Bank was performing a successful monetary policy and he did not expect new shocks.

Some Russian industrial corporations had maintained high positions in terms of world exports, including the arms, space and aviation industries despite the sanctions, he added.

Russia’s income from arms sale was $16 billion and total orders were valued at $49 billion in 2014, Medvedev added.

Oil prices fell around 60 percent between June 2014 and Jan. 2015, but recovered to about $62-$64 per barrel for the week starting April 20.