MOSCOW, Dec. 22 (UPI) -- Russian President Vladimir Putin's former finance minister warned of economic crisis in 2015 as the value of the ruble increased Tuesday.
Alexei Kudrin, a respected financial adviser and Russia's Finance Minister from 2000 to 2011, said Monday, "We have entered or are currently entering a full-blown economic crisis; next year we will feel it in full force. As for what the (Russian) President and government must do now: the most important factor is the normalization of Russia's relations with its business partners, above all in Europe, the U.S. and other countries."
He estimated economic sanctions, by the United States and Western Europe, accounted for 40 percent of the ruble's depreciation, a larger number than Putin suggested in a press conference, earlier this week, in which he struck a defiant tone against the West.
Kudrin's comments were regarded as unusually blunt for an establishment figure. He added the Russian economy would contract by as much as four percent in 2015 if oil prices remain at the current $60 per barrel, a 45 percent drop since summer.
"Russia will have its rating downgraded, it will be cut to junk. Due to the economic disruption . . . payment discipline will fall significantly and we will see a series of defaults of medium-sized and large companies. There will be a fall in living standards, it will be painful. Protest activity will increase," he predicted.
The ruble traded up for the second straight day in Moscow Monday, gaining about 12 percent over two days, to about 54 to the dollar, as domestic companies sold dollars to pay taxes, and China signaled its intent to help Russia with its currency problems.
Before the trading day ended in Moscow, OPEC confirmed its pledge to maintain oil output despite a glut on the market, further weakening any possibility of a rise in the price of oil, Russia's primary export.