Russia losing economic growth
Economic growth in Russia might drop to three percent next year, analysts say. At the same time, the rapidly falling oil prices make the experts fear that the economy could end up in crisis.
According to a leading analyst from Standard & Poor’s, the Russian economic growth could next year shrink to only three percent, newspaper Vedomosti reports. In 2007, economic growth in the country was 8,1 percent. The sectors worst hit by the downturn will be services and real estate. Also metallurgy, production of construction materials and car production will drop. The country might get zero industrial production growth, the newspaper reports. A representative from the Ministry of Economic Development himself admits that the situation could worsen further with a continued fall in oil prices. A drop in the oil price to below 50 USD per barrel will result in a budget crisis in 2010, with cuts in social spending, state investments and a postponement of the ongoing pension reform, he said. Last week President Medvedev met with key government ministers and the country’s top bankers to discuss the situation. There however it was highlighted that the Russian economy does not face immediate threats.
