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Putin: Be prepared for long oil price slump

Russian president thanks ministers for helping to navigate "a frankly complicated situation."

By Daniel J. Graeber
Russian President Vladimir Putin addressed ministers for final meeting of 2015, saying they should be prepared for a sustained slump in crude oil prices. Pool Photo by Chip Somodevilla/UPI | <a href="/News_Photos/lp/48e71404dceeca6a6eeb8f6a374fcd96/" target="_blank">License Photo</a>
Russian President Vladimir Putin addressed ministers for final meeting of 2015, saying they should be prepared for a sustained slump in crude oil prices. Pool Photo by Chip Somodevilla/UPI | License Photo

MOSCOW, Dec. 24 (UPI) -- Russian economic planners should be prepared for durable financial challenges presented by a long period of low oil prices, President Vladimir Putin said.

Putin addressed members of the government gathered for their final meeting of 2015. To start, the Russian president thanked ministers for their commitment during what he described as "a frankly complicated situation."

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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.

Putin said during his annual press conference in Moscow last week that gross domestic product growth of 0.7 percent is expected for next year. While not robust, the president said the economy is moving in the right direction. Speaking to ministers Thursday, the president said the most important task for the government is to ensure stable growth.

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"I would like to repeat that we should be ready for a possible extension of the period of low prices for our main exports and, possibly, of external limitations," he said.

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Russian finance planners said the 2016 budget was based on oil priced at around $50 per barrel. With crude oil trading below $40 per barrel, Russian Economic Development Minister Alexei Ulyakayev said "we will have to make further adjustments."

Putin said there have been steady signs of economic stabilization. From September to October, GDP grew by about 0.3 percent, compared with about 0.1 percent from the previous one-month period.

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"Overall, I would like to stress that the Government was efficient, it has demonstrated the right approaches to the complicated tasks facing the country, and I would like to thank you for this," he said in his Thursday address.

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