Russia’s recession deepened in the second quarter as gross domestic product contracted by 4.6 percent compared with the same period past year. According to the minister, IMF’s 0.2 percent growth forecast for Russian Federation is too pessimistic. Adding to the pain, Foreign Minister Sergei Lavrov said Monday that U.S. and European sanctions over the conflict in Ukraine will stay in place for a “very long” time. “I think we definitely won’t go lower, but whether we’ll pick up noticeably, that’s hard (to say)”.
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Meanwhile, Russian national currency, ruble, bounced early on Tuesday after hitting the year’s low against the US dollar on Monday when it dived to over 70 rubles for one dollar.
Speaking to reporters in Kuala Lumpur, Alexei Ulyukayev said that the central bank should be careful with monetary easing and shouldn’t spur expectations of the ruble’s devaluation, Interfax news agency reported. Ulyukayev said the measures, which curb access to capital markets, will remain through 2018.
People walk past an exchange office sign showing the currency… That’s stoking inflation, which accelerated to a 13-year high of 16.9 percent in March. The ministry’s previous baseline forecast had been for a contraction of 2.8 per cent this year and growth of 2.3 per cent next year.
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Global oil prices have been on a downward trend beginning past year, from an average of over $100 per barrel. GDP may contract 5.7 percent in 2015 under that scenario, the regulator said.
