Wed Feb 4, 2015 12:25AM
Russian President Vladimir Putin says Moscow will resort to reserve funds in a bid to resuscitate the country’s ailing economy.
Putin said on Tuesday that at this “difficult time” Russia needs “additional resources… just as in previous years” when the country used its “reserve funds” in similar situations.
The Russian president also stated that his administration is implementing a plan of priority measures “aimed at sustainable economic development and social stability.”
“The priority objectives of this plan are to provide and support industrial and agricultural production, the banking system, labor market and small and medium-sized businesses. But the main thing is the necessity to provide high quality economic growth,” Putin added.
Russia’s counter-recession moves
On January 28, Russian Prime Minister Dmitry Medvedev inked a one-year anti-crisis bill amounting to USD 35 billion in a bid to stabilize the country’s economy.
In another move, the Russian Central Bank decreased its key interest rate from 17.00 to 15.00 percent on January 30 to avert “the sizeable decline in economic activity against the background of negative external factors,” said the bank in a statement.
Russia’s inflation in 2014
Late in December 2014, Russia’s State Statistics Service (Rosstat) announced that the country’s annual inflation had drastically increased to 11.4 percent in 2014 with prices of food up by 15.4, non-food products by 8.1, and service costs by 10.5 percent.
The report added that the inflation was most overwhelming in December when consumer prices grew by 2.6 percent and the Russian ruble suffered a significant loss of value.
Banes of Russian economy
Russia has been hit with a series of sanctions by the US and the European Union, which accuse Moscow of supporting pro-Russia forces in eastern Ukraine, saying the Russian intervention poses a security threat to Ukraine and all other neighboring states. Russia categorically denies the allegation.
The Russian economy has also been strained by the tumbling oil prices. Reports show oil prices have plunged about 50 percent since June last year over increased supplies by certain countries such as Saudi Arabia, the largest producer in the Organization of the Petroleum Exporting Countries (OPEC), and a lackluster global economic growth.
OPEC, which produces about 40 percent of the world’s oil, last year decided against cutting its production to balance the market due to opposition from Saudi Arabia. Many analysts believe oil prices are being used as a political weapon against certain countries including Iran and Russia.