Russia warns of 2015 recession, as the Russian economy is tumbling with oil prices and Western imposed sanctions due to Crimea annexation. Rouble suffered its worst one-day fall since 1998, as oil prices continued its fall from Dec 1, 2014.
Russia is the world’s second-largest oil exporter, with oil and gas accounting for 70% of its exports and half of its government’s revenue. It was previously estimated that the economy would grow by 1.2% in 2015, while based on recent estimate data the economy would contracting at 0.8% in 2015. With oil as its main source of revenue, the rouble has already slid 40% in value this year (also in response to western sanctions).
With average oil price of $80 per barrel in 2015, the finance ministry’s forecast for a fall in GDP was in line with the economy ministry’s prediction of a 0.8% contraction. With the oil price averaged at $60 a barrel in 2015 was pessimistic, and at that price, the Russian economy would contract as forecast in the central bank’s “stress scenario”.