MOSCOW, Feb. 23 (UPI) -- Russia's Finance Ministry criticized a credit downgrade from ratings agency Moody's as pessimistic and out of step with developments in the oil-laden economy.
"I suspect that in making this decision to lower the rating the agency was guided by political factors above all," Finance Minister Anton Siluanov said Saturday. "I believe that Moody's rating is not just overly negative, but also based on an extremely pessimistic forecast, unparalleled these days."
Moody's said the security situation in Ukraine and the weak market for crude oil was diminishing Russia's economic strength. The rating's agency last week said the outlook for Russia was negative, leading to a downgrade in the government bond rating.
"The risk is rising, although still very low, that the international response to the military conflict in Ukraine triggers a decision by the Russian authorities that directly or indirectly undermines timely payments on external debt service," the agency stated.
The Kremlin last week warned the economy was entering a period of prolonged retraction because of the dual strains of sanctions and weak crude oil markets. Based on an full-year estimate of oil priced at $50 per barrel, the government said gross domestic product is expected to contract by 3 percent "amid persistently strong geopolitical risks."
The World Bank in December said GDP would shrink by .7 percent, based on oil priced at $78 per barrel.
The price for Brent crude oil was around $59 per barrel. The price has recovered from a mid-January low of around $45 per barrel. Siluanov said the Russian economy is positioned well to weather the storm.
"In recent months, Russia has demonstrated resistibility to unprecedented external shocks, [notably] the steep and considerable fall in the price of oil," he said.
