MOSCOW, Oct. 9 (UPI) — Stumbling under the strain of low crude oil prices, the Russian economy will run out of reserve funds as early as 2017, the deputy finance minister said.
Russian Deputy Finance Minister Tatiana Nesterenko said private sector investments are all-but out of the question when access to foreign markets is limited.
“Reserve funds are depleting. We believe reserve funds may end at such rates of their spending,” she said. “We will use up resources received when oil prices were high by 2017-18.”
The Russian military intervention in the Syrian civil war on the side of Syrian President Bashar al-Assad put positive pressure on crude oil prices. White House Press Secretary Josh Earnest said last week Russia was responding from a position of weakness brought on by the dual economic strains of lower crude oil prices and tighter sanctions.
Earnest said in 2013 the Russian economy was about 12 percent the size of the United States’ and it should end the year about half that size. The International Monetary Fund expects Russia to linger in recession, with the economy on pace to contract by up to 4 percent.
The Russian economy teetered on the brink of recession when entering fiscal year 2015. In September, Russian President Vladimir Putin called for financial stabilityand pushed for efforts “to considerably decrease the federal budget’s dependence on oil prices.”
The Russian economy relies heavily on oil for revenue. Low crude oil prices, coupled with the strain of economic sanctions, are burdens on the nation’s overall growth trajectory.
The Bank of Russia said it would keep its key interest rate at 11 percent annually because of higher inflationary risks and “persistent risks of considerable economy cooling.”