The World Bank released on Friday the Russian Monthly Economic Developments report for January indicating further growth restriction and rising inflation.
One of the factors they reported was the price for oil falling below $50 per barrel, as the oil market attempts to find equilibrium between the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers. The World Bank said oil prices fell nearly 60 percent over the past six months.
This has exacerbated the currency crisis currently affecting the federation. With sanctions from the West and other matters, the ruble has lost 46 percent of value against the U.S. dollar. As a result, the Central Bank of Russia spent $87.8 billion of its foreign reserves in order to strengthen the ruble.
Continued devaluation and other factors including lowered oil prices and sanctions have lead Fitch to downgrade the federation to a BBB rating.
Despite efforts from the Central Bank, inflation reached double-digit numbers and the federal budget is expected to see a deficit to account for rehabilitating the banking sector. As a result, the World Bank has lowered growth expectations to -2.9 percent.