Russia Faces Recession for Two Years With $50 Oil, IMF Says

[bloomington-lib]

Source: bloomberg

Russia’s economy would slip into recession for one to two years if oil prices fall to $50 a barrel next year and stay at that level, according to the International Monetary Fund.

The worst-case scenario “illustrates the continuing vulnerabilities of the Russian economy” because of its dependence on commodity exports, said Odd Per Brekk, the IMF’s senior representative in Moscow.

Russia will grow 4.3 percent this year and 4.1 percent in 2012, less than previously forecast because of a worsening outlook for oil prices, the Washington-based lender said yesterday in a report. In June, the IMF had estimated growth of 4.8 percent and 4.5 percent.

“We expect a continuation of the fairly tentative recovery in the Russian economy combined with fairly high inflation,” Brekk told a round-table today in Moscow, after the forecast cut. “But even with those downward adjustments, we still consider the risks to be on the down side.”

Read more: http://www.bloomberg.com/news/2011-09-21/russia-faces-recession-for-two-years-with-50-oil-imf-says-1-.html

[Cirque du So-What]

1. I give more credit to stagnant oil prices throughout the '80s

as a contributing factor to the decline and collapse of the Soviet Union over anything conservatroids tout as an 'accomplishment' of St. Ronnie.

[Javaman]

2. That and Afghanistan. nt

[Cirque du So-What]

3. The cost of waging war in Afghanistan

was directly related to depressed oil revenues. I would say the root cause is declining oil revenues, which were definitely exacerbated by a costly war of occupation.

[Javaman]

4. Like I have said in the past...

we go to war for oil to support the military's need for oil.

the classic cluster fuck.

the military is the single largest user of fossil fuels in the US, but you will never ever hear that mentioned by any of our illustrious politician's. According to them, we the people are the only ones at fault.

[JDPriestly]

5. + 1000

[liberal N proud]

6. Afghanistan broke Russia and it is doing the same to the US

Raygun had nothing to do with it.

[Cirque du So-What]

7. Yep

And the Soviet Union generated revenues from the export of oil, which throughout the '80s wasn't enough to cover the cost of war in Afghanistan. Imagine the drain upon the US economy!

[julian09]

8. So, who expects oil prices to sink to $50 ? unbelievable

[Javaman]

11. I know, that was the non-starter for me.

50 bucks a barrel?

the only way it becomes 50 bucks a barrel is when no one needs it anymore and the 50 bucks will only be a sign post on it's way to zero.

[bongbong]

9. Funny stuff!

> he worst-case scenario “illustrates the continuing vulnerabilities of the Russian economy” because of its dependence on commodity exports,

In contrast, the USA economy is dependent on exporting pieces of paper labeled "Treasury Notes".

[bemildred]

10. The IMF has a lousy track record for prediction. nt