Oil is still expensive enough but hardly at the bubble rates of last year. The latest Russian efforts to revive the glories of the past (also known as ego) were funded on high oil prices but this will have to be put back on the shelf for a few more years until the next oil bubble arrives. MarketWatch:
"With a much worse global financial outlook and oil prices in the $45 a barrel range, Russia's economy is likely to contract by 4.5% in 2009, with further downside risks," the World Bank said in a report released Monday.
The new forecast is a major downward adjustment from the World Bank's previous estimate of 3% growth. Russia, which has vast resources of oil, gas and metals, has been hit hard by the global economic crisis.
As a result of the expected macroeconomic contraction, Russia's fiscal surplus from last year will turn to a sizeable deficit, according to the bank.
