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Russian ex-minister says Russia has 3 years to adjust to new oil prices

January 22, 2015, 11:19 UTC+3 DAVOS

According to Alexey Kudrin, the Russian economy should have adjusted to the $60-$80 range

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© Viktor Drachev/TASS

DAVOS, January 22. / TASS / Russia has three years to adjust to new oil prices, but it will have to cut costs, former Finance Minister Alexey Kudrin said at the VTB Capital business lunch at Davos Economic Forum on Thursday.

"For the next two years the price could be $60," Kudrin said and added that the price of $100 per barrel was not ordinary.

According to Kudrin, the Russian economy should have gotten used to the $60-$80 range. "The fact that the government allowed itself to form the budget at $100 per barrel, is a whole other issue," he added.

We have three years to get used to the oil prices," Kudrin said. "The next couple of years will be difficult. We have to cross over to a different level of spending."

As an economist, Kudrin said that the influence of sanctions is as serious as the drop in oil prices in terms of the effect on the Russian economy.

"In the future, there won't be a drastic change in the currency exchange rate," Kudrin said. "After getting the double punch, Russia is seriously feeling the consequences."

Kudrin calculated that the current situation will lead to a 40% decrease in import, which will worsen the conditions for the growth of the economy.

Infographics Oil prices over 30 years

Oil prices over 30 years

Year-average inflation-adjusted oil price. Infographics by TASS

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