The tailspin in global oil prices will push Russia’s current account and budget balances into deficit but shouldn’t create severe strains in the economy. It would probably take a steeper fall in prices, to $25pb or lower, to put a brake on plans to raise oil output. The government will probably delay some of this year’s spending plans and the slump in the ruble is likely to put the central bank’s easing cycle on hold for several months. The risks to our growth forecast lie firmly to the downside.
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