The Russian economy (catch all)

[Firn]

The oil prices is of course of huge importance for the Russian economy which is quite similar in some ways to a Gulf state. Crash in Oil Prices Deals Blow to Sanctions-Hit Russian Economy is for my taste a bit sensational.

Russian Urals crude weakened for an eight straight trading day on Monday due to weak European refining demand, falling well below $100 a barrel for the first time in a year in a move to increase the pain for Russian state finances amid Western sanctions.

Russia has balanced its budget at $114 a barrel this year as President Vladimir Putin is ramping up social military spending amid a conflict in Ukraine, which sent relations between Moscow and the West to their worst since the end of the Cold War.

The fall of the ruble against the USD should actually help to cushion the lower oil prices but on the other side the Kremlin seems to spend more. This plan is just the latest of a series of creative ways helping to balance the budget.

The Russian government may start helping itself to a bigger share in its Central Bank's profits, in the latest attempt to plug up holes in a federal budget under pressure from Western sanctions and a sharp economic slowdown.

In a move not expected to seriously affect the regulator's operations, 75 percent of the Central Banks' profits for 2013 and 2014 would be syphoned into the federal budget over the next two years, up from the usual 50 percent, under a Finance Ministry bill approved Tuesday by the government's legislative commission. The government is to consider the proposal at an upcoming session.

Russian import ban fuels food price rises

Since the ban was imposed on 7 August imported pork used in processed meat in Moscow has gone up by 6%, Russian business daily Kommersant reports.

In St Petersburg food prices have risen 10%. That inflation occurred even before the impact of sanctions.

Russia's ban on many Western foods is retaliation for sanctions over Ukraine.

The St Petersburg government's economic policy chief, Anatoly Kotov, said the pork price had risen by 23.5% and chicken by 25.8%.

It is important to point out that much of the negative effects of the food bans might still be ahead. Still early days in that area.