Putin Upbeat About Russia Economy Despite Sanctions

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Russian president Vladimir Putin has scoffed at international claims that his country’s economy is in trouble and that rouble is in decline.

In a telephone call-in programme on Russian TV, he told viewers that Russia’s economy was performing well and that the rouble was standing strong against foreign currencies.

Nevertheless, the value has dropped from 36 roubles to a US Dollar to around 55 roubles to the dollar in the past year.

He brushed off claims from the International Monetary Fund that the Russian economy had severe problems and claimed falling growth is not as bad as feared.

The IMF forecasts the economy will shrink by between 3% and 5% in 2015 and a further 1.1% next year.

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Talking up the rouble

The problems Moscow faces include strict economic sanctions from the US and Europe over the annexation of the Crimea and support of armed militants in The Ukraine.

Russia is also one of the world’s largest exporters of oil and gas. The price of oil has been hit hard in the past months, with the cost per barrel plummeting from $100 to $50.

Putin told viewers not to worry about what outside sources were saying about the economy and that the real figures would be an improvement on their forecasts.

He did tell his audience that agricultural production had increased by more than 3% and that unemployment was falling, but explained the average Russian felt less financially well off as inflation was running at 11.4%.

“The rouble is stronger than many think,” he said. “Our action to devalue and increase interest rates helped restore some value after a slump. Our economy is not just oil, so the price per barrel does not affect the economy as much as some would have us believe.”

Rebalanced economy

The president claimed the economy was rebalancing away from a dependence on oil and moving to a technology sector.

“The country needs to move on from these times of adversity,” he said.

“Working together we can meet any challenges, so it is important to keep the nation economically and politically stable.

“The government will have to cut spending as much as possible without hurting people’s pockets.”

Opposition with the country was not so upbeat about the economy as Putin.

Former finance minister Alexei Kudrin reckoned sanctions would cost the country around $200 million over the next three years and would severely impact on budgets.

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