Support The Moscow Times!

Russian Ministry Predicts More Recession, Lower Incomes and Less Employment

New falls in the oil price mean that Russia's economy will likely shrink again in 2016, as incomes continue to fall and unemployment rises, according to a draft outlook prepared by the Economic Development Ministry.

Officials had hoped for an end to recession this year, but a near 20 percent decrease in the price of oil in early January has forced a reassessment.

The new outlook, obtained by the Vedomosti business newspaper, assumed an average oil price of $40 per barrel over 2016, down from the $50 per barrel built into the current budget plan, but higher than the current price of around $30.

The lower price will ricochet through the economy, the report said, according to Vedomosti. Instead of growing by 0.7 percent, the economy will contract by 0.8 percent, while industrial output will fall slightly and investment will decline by 5 percent from last year, it said.

A weaker ruble and higher-than-expected inflation will continue to make Russians poorer. Real incomes will fall by 4 percent, instead of the 0.7 percent previously predicted, and unemployment will rise by half a percentage point to 6.3 percent, the report said.

Russia is already mired in its longest recession since President Vladimir Putin became president in 1999. The economy contracted by an estimated 3.7 percent last year, and officials have warned of government spending cuts this year. However, a wave of patriotism unleashed by military actions in Ukraine and Syria has kept the president's approval ratings at record highs.

… we have a small favor to ask. As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

Once
Monthly
Annual
Continue
paiment methods
Not ready to support today?
Remind me later.

Read more