June 7 (UPI) — Riding improvements in the price of oil from recession to recovery, Russian President Vladimir Putin said Thursday the economy is on stable ground.
Russia’s economy lingered in recession in 2016 and the national currency, the ruble, declined in value after crude oil prices dipped below $30 per barrel. Oil prices have been fluid this year, trading in a range of around $62 per barrel to $80 per barrel for Brent, the global benchmark for the price of oil.
Russia is party to an effort led by the Organization of Petroleum Exporting Countries to limit production in order to balance an oversupplied market. It’s the largest contributor to that effort among non-member states, pledging to sideline about 300,000 barrels of oil per day.
After the deal was brokered in late 2016, Russian Central Bank Governor Elvira Nabiullina said recovery for the Russian economy will be slow with only minor growth for gross domestic product expected.
Speaking Thursday in a marathon question and answer session, Putin said the economy was on solid ground. Growth is still slow, but it’s sustainable and inflation is low, which he said was a prerequisite for forward momentum. Investments in the Russian economy, meanwhile, are up 4.4 percent from last year.
“This is a very good indicator,” he was quoted by Russian news agency Sputnik as saying. “It suggests that growth is also guaranteed in the short term.”
Western-backed sanctions targeting Russian energy companies contributed to economic headwinds. The U.S. Treasury Department opened a safety valve in late April by offering some sanctions relief to Russian aluminum producer United Co. RUSAL, the second-largest company of its kind outside of China.
Putin has stuck with a theme of recovery for most of the year. Growth in GDP in Russia is forecast at 1.8 percent this year, compared with 1.5 percent in 2017. By contract, the U.S. economy is expected to grow by 2.7 percent, according to OPEC economists.