World Economy

Putin: Economic Crisis Over

Putin: Economic Crisis OverPutin: Economic Crisis Over

Russian President Vladimir Putin said next year’s budget based on oil at $50 a barrel is too optimistic, considering current prices. However, he has assured the country that the worst of the economic crisis is over.

“We are aware of the high dependence of our economy on the price of our traditional export products–oil, gas and their derivatives. We proceeded from the fact that the average price for Brent will be $100 per barrel,” said Putin during his annual televised press conference on Thursday, RT reported.

“When the price dropped from $100 to $50 per barrel we planned the budget considering these figures. Now the price is $38. We are forced to revise again,” Putin said.

Putin said low oil prices have dragged down the Russian economy, but it’s slowly recovering and the worst of the crisis is behind.

“It is a 3.7% GDP contraction, 12.3% inflation. The real income of the population has fallen, the investment in fixed assets decreased by 5.7%. However, statistics show that the crisis in the Russian economy as a whole has passed its peak. From the second quarter, there are signs of stabilization in business activity. In September and October, GDP grew by 0.1-0.3% compared to the previous month,” he said.

“Our foreign reserves stand at $364.4 billion. They’ve depleted a bit, but it’s still a very solid figure,” said Putin.

Later on Thursday, the Central Bank of Russia reported that the country’s international reserves had grown almost $7 billion in the second week of December to $371.2 billion.

According to Russian Economic Development Minister Aleksey Ulyukaev, $40 oil doesn’t threaten stability in the economy, but won’t allow GDP, production and consumer demand to turn positive next year.

In the budget for 2016, the Kremlin was relying on $50 per barrel and 63.3 rubles per dollar.