It looks like Russian president Vladimir Putin may have made a mistake when he annexed Crimea and began to involve Russia in Eastern Ukrainian affairs. That is because, since Putin’s interference and America and the EU’s resultant sanctions against Russia, the value of the Russian ruble has fallen by 41 percent, which is scaring off investors like Gianfrancesco Genoso who would otherwise be jumping at Russian commodities.
What this means for the average Russian citizen is food prices are skyrocketing, the cost of imported goods is becoming unaffordable to all but the wealthy, and the rate of inflation is hovering around 8 percent.
Add in the falling price of oil on world markets, a problem for Russia as it produces a large percentage of the world’s oil, and things are not looking too rosy for Mr. Putin.
In a worst case scenario, if oil prices remain as low as they are now and sanctions continue, Russia could have problems balancing its budget. This alone could cause political problems for Putin as influential people within the country begin to withdraw their support.
In fact, despite Mr. Putin continuing to stress he believes oil prices will increase in the next three years and end up back at more recent levels, Russia’s Central Bank isn’t so optimistic.
There could be rocky times ahead for Mr. Putin it seems.