The Russian government has warned the economy will fall into recession next year as Western sanctions, in response to its role in eastern Ukraine, and falling oil prices begin to bite.
According to BBC News, Russia’s economic development ministry estimates the economy will contract by 0.8% next year.It had previously estimated the economy would grow by 1.2% in 2015.
Russia’s reliance on tax revenues from the oil industry makes it particularly sensitive to price movements.
Household disposable incomes are also forecast to decline by as much as 2.8%, compared with a previous estimate that they would grow by 0.4%.
The sharp revision in Russia’s economic forecast is the first admission from the government that the economy will contract.Read more