High Oil Prices And The Russian Economy - 1429 Words

High flying oil price benefited oil producing countries past 5 years until recent petroleum price plunge. Russian was the one of beneficiaries who has enjoyed the high oil price. The Russian economy stabilized without much of restructuring the economic system or economic growth by developing new industry. High oil price created budget surpluses and keep Russian economy afloat; However, increase of the US oil production, oil price war between Saudi and Kuwait, debilitating European economy, and decreasing oil consumption in Asia contributed to drive oil price down quickly and substantially. Russian GDP signals that its economy gets pounded and affected hardest among major oil exporters. The Russian budget has been in balance with small portion of public debt in comparison to national GDP. Falling price of petroleum drastically reshaped the Russian economy. Financial forecasts and analysis predict that economic recession could come back to Russia. Crumbling Russian ruble and dwindlin g exports slashed 2014 Russian GDP, and its GDP will fall lower than Spain or South Korea. Without serious police changes or development of technology, already battling Russian economy will be much worse place than 2014. The Russian economy suffers from three severe blows: debilitating structural policies and strict financial sanctions from the West, and continually falling oil price. Russia has sustained significant changes since the collapse of the Soviet Union, moving from aShow MoreRelatedThe Russian Ruble Crisis And Its Aftermath1453 Words   |  6 PagesTHE RUSSIAN RUBLE CRISIS AND ITS AFTERMATH After the collapse of Communism and the dissolution of Soviet Union in early 1990’s, the Russian government planned to restructure the economy by abolishing the system of price controls, in a hope to save the falling economy. 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