Russian oil production expected to drop

MOSCOW, July 7 (UPI) -- An anticipated drop in oil production by 2016 is expected to hurt the Russian economy, the Russian Finance Ministry said Monday.

The ministry said Monday it expects a $4.5 billion decline in oil export revenue because of an anticipated 6.3 percent drop in oil production from 2014 figures.

The ministry said the federal budget next year will receive about $2.2 billion less than expected because of a contraction in exports.

A report on the Russian economy from the World Bank in March said real gross domestic product growth in 2013 was 1.3 percent, compared with 3.4 percent in 2012. There's a "confidence crisis" emerging within the Russian economy, the bank warned.

"In the past, the lack of comprehensive structural reforms was masked by a growth model based on large investment projects, continued increases in public wages, and transfers -- all fueled by sizable oil revenues," it said.

Russian energy exports last year accounted for more than 10 percent of GDP.