Russia freed itself from dependence on oil

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www.vsyako.netPhoto: Anatoly Zhdanov / Kommersant

The relationship between world oil prices, the ruble and the state of the Russian economy in recent times have considerably decreased. To such conclusion analysts of the international rating agencies S&P, extracts from the report which leads owned by the family Demyan Kudryavtsev, the newspaper “Vedomosti”.

The authors refer to statistics for the year 2018. According to them, the growth of domestic demand in the Russian economy slowed, imports of goods from abroad rose only four percent, and this despite the increase in oil prices, which in annual terms amounted to 30 percent. Besides, in the period from April to September, a barrel of Russian Urals rose in price by 20 percent, and the ruble fell by 13 percent.

This situation is anomalous, since the rise in oil prices is usually accompanied by increase in dollar sales by oil companies and growth of export duties and tax on mineral extraction (met), which are tied to commodity prices. Because of this, the oil companies previously were forced to spend more export dollars to buy rubles (the payment of salaries, taxes and duties).

Thus, the demand for rubles has increased, and the ruble exchange rate grew along with oil prices. However, in 2017, Russia began to operate a fiscal rule under which oil and gas revenues (when world prices are above $ 40 per barrel) sent to the national welfare Fund (NWF). This has paid taxes to the budget again, changing the currency, which leads to the weakening of the ruble. Windfall, before heading on a spending budget, now is actually not used, slowing potential economic growth in the country.

Also, according to analysts, the Russian economy is strongly affected by Western sanctions. International investors are more focused on them, not on oil prices, taking decisions about investing in Russian assets.

Video, photo All from Russia.

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