Economic security
Russia’s economy is dependent on oil
and gas. Hydrocarbons are responsible for roughly 70 percent of Russian exports
and, directly and indirectly, for almost 80 percent of the Russian federal budget.
The recent downfall of oil prices, along with the isolation from
Western capital markets following the Russian annexation of Crimea and support for separatists in eastern
Ukraine, has severely damaged Russia’s economic situation. Stagnation turned
into recession, the ruble devalued and inflation became double-digit. It all
made the situation inflammable, and an unexpected and unexplained decision of
the Central Bank to raise the prime rate from 10.5 percent to 17 percent overnight
immediately caused brief but powerful panic among consumers and in securities
markets. It allowed many analysts to derive apocalyptic predictions, including
the forecasting of problems with sovereign and corporate currency-denominated
debt repayments.
Russia’s economy is dependent on oil
and gas. Hydrocarbons are responsible for roughly 70 percent of Russian exports
and, directly and indirectly, for almost 80 percent of the Russian federal budget.
The recent downfall of oil prices, along with the isolation from
Western capital markets following the Russian annexation of Crimea and support for separatists in eastern
Ukraine, has severely damaged Russia’s economic situation. Stagnation turned
into recession, the ruble devalued and inflation became double-digit. It all
made the situation inflammable, and an unexpected and unexplained decision of
the Central Bank to raise the prime rate from 10.5 percent to 17 percent overnight
immediately caused brief but powerful panic among consumers and in securities
markets. It allowed many analysts to derive apocalyptic predictions, including
the forecasting of problems with sovereign and corporate currency-denominated
debt repayments.
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