Russian Economy Demands Attention
MOSCOW – INTERNATIONAL – Facing increasing economic pressure, Russian President Putin has cancelled his cabinet’s Christmas vacations so the Government can deal with the growing crisis. “The Government and its various structures cannot afford such extensive holidays, at least not this year,” stated President Putin.
Russia is facing increased sanctions from the west over the Ukraine.
“This year was not easy, but as we use to say, we can hardly remember an easy one. Overall, the Government is effectively tackling the challenges that the economy and our country as a whole have to deal with,” Putin told his government in the final meeting of the year. “The Government bears great responsibility. We have seen during the past months how turbulent the global economy is and how this affects us. I would like to reiterate something we all know – that the difficulties we have come across are not only of an external type. They are not only due to some sanctions or limitations caused by the global market situation – they are also the result of our own shortcomings that have piled up over the years”.
President Putin added, “This is what we have inherited historically. However, we have been making efforts to change the structure of our economy, to refine it and make it more innovative. Quite a lot has been done in this direction. However, recent events show that this is not enough. Therefore, I would like to ask you to focus on the main areas. These, of course, have to do with our social commitments and maintaining the national currency exchange rate. This is primarily a job for the Central Bank, however without adequate coordination with the financial and economic blocs in the Government the Central Bank will hardly be efficient”.
Oil Price Pounding Putin
Coupled with falling oil prices on the global markets, the country’s income. The price of a barrel of oil as it falls is costing Russia’s economy.
Russia is one of the largest producers of oil in the world. Each $1US drop in the price of a barrel of crude oil costs the Russian economy almost $2billion is revenues. That is already hammering the Russian economy.
Russia’s rouble strengthened on Thursday as exporters sold foreign currency in response to government pressure and to meet tax payments, but trading volumes were thin as many Western markets were closed for the Christmas Day holidays.
Early Thursday, the rouble was 1.7 percent stronger against the dollar at 52.55 and gained 1.5 percent to trade at 64.53 versus the euro . The rouble earlier hit its highest against the dollar and euro since Dec.