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Kudrin: Russia to experience economic crisis even with oil price of $80.00 per barrel

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Aleksei Kudrin, chairman of the Committee of Civil Initiatives, is confident that next year Russia will experience a wide-scale economic crisis: GDP will drop to 4%, inflation will reach a two-digit level, many big and medium-size companies will go bankrupt, non-payments and unemployment will grow.

            Kudrin has urged the authorities to reconcile with the West as soon as possible, because otherwise the anti-crisis measures may not work.

            “Reduction of GDP will constitute 2% with the oil price of $80.00 per barrel and 4% with $60.00 per barrel (In 2015 the Ministry of Economic Development forecasts GDP decline by 0.8%),” he told Moskovskii Komsomolets newspaper. The inflation rate will reach 12-15%, the volume of import will reduced by 40%, because of the sanctions, Ruble rate and low purchasing capacity of population. This will complicate the country’s access to the advanced technologies and slow down the modernization.

For the first time during Putin’s presidency, Russian citizens’ real incomes will be reduced by as minimum 5% (the Ministry of Economic Development forecasts 2.8%. The country’s international ratings will go down to the “rubbish” level.

            Kudrin said that in March 2014 he was asked to work out the forecast of possible consequences of Crimea’s annexation to Russia for the economy. “I have met with Putin and Medvedev and submitted three scenarios of development of events. Now we have been following the second scenario. I have submitted the forecast in a written form to the President’s assistant. I do not know if he has taken them into consideration or not. But I have an impression that Putin does not have enough information about development of the crisis in 2015.”

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