Former Minister of Finance of the Russian Federation, Alexei Kudrin, was engaged in talks last week with Russian President Vladimir Putin and other top officials about returning to a senior post to help deal with the worsening economic situation.
According to Kudrin, if oil prices continue to fall, there will be a further decline in the Russian economy.
Kudrin holds that the Russian economic crisis has not yet reached its pinnacle, and argues that “today we see a further deterioration of the economic situation, starting from November.” Many analysts, however, have stated that the economy has already hit rock bottom and is now gaining momentum.
"The situation is still unstable. We have one more serious problem in the sharp decline in oil prices. If the price remains at this level for another half a year or year, a further decline of the economy awaits us," Kudrin said in an interview with Interfax.
The former Finance Minister believes that 2016 will bring about many more challenges, and consequently government spending will decrease. Kudrin also highlighted the fact that the devaluation of the ruble still hasn’t affected consumer prices, and predicted that inflation in the next year will reach a whopping 7.9%, much higher than the official forecast of 6.4%.
"All these things can lead to high loan rates and perpetuation of risks in a whole number of industries, both in production and employment, profits, there is a risk of a new wave of debt non-payment... Now the situation is not very good, but… It is stable now, except for individual banks or individual branches. But it can deteriorate," he said."
While evaluating the anti-crisis measures that the Russian government has already taken, Kudrin remarked that the Kremlin’s attempts have fallen short of what needs to be done.
"Yes, the anti-crisis measures, perhaps, lifted the peak of the problems. I agree. They have especially played a key role in the banking sector. However, the collapse in investment and real income were significant….the state has to do more. For example, the country's management has to simplify regulation, improve economic indexes, and reduce costs for businesses".
While commenting on the recently introduced economic sanctions against Turkey, the former Finance Minister stressed that Russian businesses will be adversely affected, explaining that trade with Turkey is pivotal for the construction industry in Russia.
Kudrin took an all-around pessimistic view of an economy that has been badly damaged by economic sanctions and the steep drop in oil prices. While the former Finance Minister did acknowledge that he met with Putin and Medvedev last week, he stressed that "an invitation to join government service was not discussed." Kudrin is currently the Dean of the Faculty of Liberal Arts and Sciences at St. Petersburg State University.