Russia’s economy stalls


A few months ago, Russia’s economy seemed to be recovering from its problems in the late 1990′s. High prices meant oil revenues were increasing, and the currency was strong. Now, the combination of the oil price collapse and the credit crunch has reversed the position. Yesterday, the central bank was forced to raise rates to 12% to slow the rouble’s fall.

ICIS news reported this month that some planned petchem investments have already been postponed. Russia is also the world’s 2nd largest oil producer. But as the blog noted in May, the easy gains in production have been made. Now, only “the difficult fields” remain to be exploited. Without cash, Russia’s oil production will slow even faster, setting up more feedstock problems for the chemical industry in the future.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. Paul is also an invited member of the World Economic Forum’s Global Agenda Council. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such as oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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