SOCHI, Russia, Jan. 11 (UPI) -- With oil prices collapsing below 10-year lows, Russian President Vladimir Putin said one of the greatest threats to his country was an economic one.
During his final address to Cabinet ministers last year, Putin said the financial situation was "a frankly complicated situation."
Lower crude oil prices are creating fiscal problems for economies like Russia that depend heavily on energy exports for revenue. Markets are already flush with oil and gas amid slow global economic recovery and, for Russia, access to certain economic districts is limited further by sanctions imposed by Western powers wary of its influence in crises in Ukraine.
In an interview with German newspaper Bild, the Russian president said the economy was weakened to the point that revenue outside the energy sector was now feeling pressured. The worst threat, however, was the harmed caused by falling oil prices.
"We are witnessing a decrease in gross domestic by 3.8 percent, in industrial production by 3.3 percent and an increase in inflation, which has reached 12.7 percent," he said from Sochi.
The Kremlin expects GDP growth of around 0.7 percent for 2016. From September to October, GDP grew by about 0.3 percent, compared with about 0.1 percent from the previous one-month period.
For inflation, Putin said the rate had dropped to 12.3 percent by mid-December. The Central Bank of Russia has set a goal of 4 percent by 2017.
The price for Brent crude oil, the global benchmark, is about 30 percent lower year-on-year, trading at levels not seen since the middle of the last decade.