MOSCOW--Oil prices will not bounce back and return to $100 per
barrel any time soon, Russia's Finance Minister Anton Siluanov said
Wednesday.
A sharp drop in oil prices has hit hard Russia, one of the
global major exporters, whose economy has been already suffering
from Western sanctions imposed on Moscow for its policy in
Ukraine.
"External shocks cost the balance of payment $200 billion," the
minister said as he presented the government's crisis plan to the
upper house of the parliament.
Mr. Siluanov blamed the pain "primarily" on the plunge in oil
prices and didn't mention the sanctions.
The combination of the sanctions and the oil prices pushed the
Russian economy into recession with a contraction expected at more
than 4% in 2015, saw inflation rise to 12.5% and a sharp weakening
of the ruble, which has lost about 50% in the past 12 months.
In response to that the government proposes a 10% cut in
budgetary spending, aiming at having a balanced budget by 2017.
Hopes that oil prices will rebound are ungrounded, the minister
said.
Increased global oil output and the slowing world economic
growth result in lower prices, Mr. Siluanov said.
"We met with major global oil producers, but no-one is going to
cut production," said the minister.
Oil prices will remain at the low level, and it's highly
unlikely they will return to $100 per barrel. There will be no
bouncing back any time soon, like it was in 2009," he said.
Write to Alexander Kolyandr at alexander.kolyandr@wsj.com
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