Russian economy to endure difficult 2016, warns minister

[MOSCOW] Russia's finance minister predicted Wednesday that 2016 would be a difficult year for his country's recession-hit economy, already reeling from low oil prices.

As the economy slides, Russia's battered rouble reached a 2015 low on Wednesday, standing at 73.24 against the dollar, a year after suffering its worst decline in 15 years.

"Next year will not be simple," Anton Siluanov said in an interview with Russian state television. "The latest predictions show that the price of our main exports could be lower than predicted." The rouble lost around half of its value in 2014 but recovered slightly as energy prices stabilised earlier this year, allowing officials to claim the worst of the crisis had passed.

But the recent decline in oil prices - with Brent crude reaching an 11-year low this month - has cast a shadow on the recovery of Russia's oil-dependent economy.

The country's 2016 budget had been calculated on an oil price of US$50 per barrel, a figure President Vladimir Putin said was an "optimistic" assessment of the situation, with the price now hovering around US$37.

Siluanov predicted the oil price would stay around US$40 per barrel on average, and that spending cuts and privatisation measures would be integrated into the budget.

At his annual press conference earlier this month, Putin insisted the country could weather the headwinds, despite volatility in oil prices.

The Russian government has forecast the country's GDP would increase 0.7 per cent next year, after falling 3.7 per cent in 2015.

AFP