Russia faces possible devaluation of the rouble and a severe drop in living standards next year
The collapse in the value of oil was likely to have several catastrophic consequences for Russia including a possible devaluation of the rouble and a severe drop in living standards next year, they warned.
With oil prices tumbling, and his own credibility at stake, Russia's prime minister Vladimir Putin today insisted that the country's economy was still robust.
Speaking at a meeting of the pro-Kremlin United Russia party, Putin told delegates in Moscow the country would survive the current global financial turmoil - which he blamed on the US....
...The fall in oil prices from $147 this July to below $50 today has blown a gaping hole in the government's budget calculations. It is now facing a $150bn shortfall in its spending plans - and will have to slash expenditure in 2009.
Today Putin sought to assure hard-up Russians that their social benefits would not be affected, promising a $20bn assistance package. "We will do everything, everything in our power ... so that the collapses of the past years should never be repeated," he said.
The oil slump, however, exacerbates Russia's already severe economic problems. Since May Russian markets have lost 70% of their value. Russia's central bank, meanwhile, has been spent $57.5bn in two months trying to prop up the country's ailing currency....MORE