Higher Oil Prices Are Making Russia Richer — but Not Helping Its Economy Grow, Goldman Says
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3 Articles
Higher oil prices are making Russia richer — but not helping its economy grow, Goldman says
Rising oil prices are boosting the Kremlin's finances under Russian President Vladimir Putin, but economic growth remains sluggish.Getty ImagesSoaring oil prices are making Russia richer, even under Western sanctions.High crude prices are boosting Russia's exports, government revenue, and cash inflows.However, labor shortages and weak productivity are keeping growth stuck below 1%.Sanctions-hit Russia is raking in more money from high oil prices…
The Russian economy shrank in the first quarter for the first time in three years and the country teeters on the brink of recession. Oil prices have risen due to the Gulf War, but they would need to stay above $100 a barrel for at least a year to help the Russian economy significantly. But even that would not solve the problems affecting growth, inflation and the banking sector.
Rising oil prices are making Russia richer, despite Western sanctions. High oil prices boost the value of Russian exports, government revenues, and the inflow of cash into the country. However, labor shortages and low productivity keep economic growth below 1%.
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