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4 Mar, 2020 10:05

Russia slowly getting over its oil addiction, says Putin

Russia slowly getting over its oil addiction, says Putin

Russia is trying to shield its economy from turbulence in global energy markets, but cutting the country's reliance on oil cannot happen at once, Russian President Vladimir Putin believes.

"We are gradually weaning off [oil], by the way. We are really moving away from it, because the share of non-oil and non-gas revenues is growing. But this requires time, and it cannot be done at the drop of a hat," Putin said in an interview to TASS news agency, released on Wednesday.

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Despite the official statistics showing that inflation rate currently stands at around 3.5 percent, Russian people feel that prices are going up and their incomes have been on the decline in recent years, the president acknowledged. Incomes were hit badly by a steep decline in global crude prices, and the government is "obliged" to do something to settle this key social issue, he said.

"Everything kept growing as long as oil was at $100 per barrel or higher. Now it is $60. You see the difference, don't you?" Putin said. "This explains why we launched these National Projects with the aim of changing the economy's structure and promoting self-sustaining development."

The Russian economy was booming during Putin's first tenure as president. The gross domestic product (GDP) was growing between 5 percent and 10 percent before 2009, when the consequences of global financial crisis reached Russia. The crisis thwarted the country's plans to double its economic growth, forcing the authorities to tackle more urgent problems.

Also on rt.com US sanctions helped Russia to boost oil exports in 2019

"It was essential to prevent the economy from collapsing and the public's savings from being wiped out," the Russian leader said, adding that he was serving as prime minister at the height of the crisis. "I had to publicly announce — this was a huge risk, frankly speaking — ... that I would prevent a repeat of the 1998 crisis... And we prevented that. But, indeed, it harmed our development."

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