Falling oil prices and a fast depreciating ruble are among several factors that have all but ravaged the Russian economy. The rest of the world’s already seen how those factors, among other things, have already negatively impacted the Russian economy—and, to most, the situation looks beyond recovery at this point.
But, Russian President Vladimir Putin doesn’t think so. In fact, the Russian President revealed that he believes that Russia will more or less adapt to the dire economic consequences of Western sanctions, falling oil prices and the like.
During his annual press conference that took place yesterday, Putin commented that ‘the Russian economy must adapt to the reality of oil prices that could potentially fall as low as $40 a barrel.’
‘I don’t know how fast it will occur, if prices stay at the current level or if they’ll end up dropping lower than $60, [than] $40,’ Putin had commented at the conference. ‘The [Russian] economy will accordingly structure itself, however much is necessary to do so.’
As an economy partially propped up against the value of crude oil and gasoline, the Russian economy has seen better days. The nation is now up against its biggest financial crisis since 1998, a time where the nation had to default on domestic loans.
The ‘worst case scenario’ currently looming over the economy was published by the Central Bank of Russia this past week, envisioning oil prices falling to a $60 per barrel average until the end of 2017. With those conditions in mind, the central bank forecast the Russian economy ‘contracting at least 4.7 percent by next year and another 0.9 to 1.1 percent by 2016.’
Interestingly enough, Putin also commented that the United States and Saudi Arabia ‘may be colluding to push down oil prices farther down than they already are.’ Not only that, the two biggest crude oil producers behind Russia may be pushing prices down due to a ‘market share battle between shale oil companies and traditional oil producers.’
Oil is projected to hit its biggest losses in a year, the biggest annual losses on record since the global financial crisis back in 2008.