Economist Dr. Mikhail Melnik: Russian Economy Heavily Dependent On Prices Of Oil
Southern Polytechnic State University Economist Dr. Mikhail Melnik told Benzinga that the rise of oil and natural gas prices during this century helped Russia overcome the economic disarray of the 1990s.
“The addiction to energy prices spread throughout the economy,” he said.
Today, Mikhail explained that everything from real estate in Moscow to the budget of the country is very dependent on the price of oil.
“Give the share of energy commodities in the nation’s exports, the currency is also dependent on the commodity prices,” he said. “And it seems that this recent pullback in energy prices was not anticipated by the Russian policy makers.”
The SPDR S&P Russia ETF (NYSE: RBL) was down 2.1 percent at $13.38 Tuesday afternoon.
The Market Vector Russia ETF Trust (NYSE: RSX) was nearly unchanged at $13.96.
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