Sanctions, falling oil price cost Russia $140b yearly

MOSCOW - Russia might suffer a loss of at least $140 billion annually as a result of the adverse impact brought along by economic sanctions and falling oil prices, Finance Minister Anton Siluanov said Monday.

"We lose about $40 billion due to sanctions and another $90-$100 billion due to the 30-percent drop of oil price," Siluanov said at an international economic forum here. He insisted that western sanctions are not the factor as much critical as global market prices of Russian exporting commodities to influence the Russian budget and ruble's exchange rate.

Geopolitical factors have caused foreign investments into Russian economy to shrink, coupled with the trend of common people and businesses converting ruble assets into foreign currencies, Interfax news agency quoted Siluanov as saying.

Siluanov estimated Russian economy would lose about $130 billion this year.

The Russian ruble has fallen approximately 23 percent against the US dollar in the past three months as a result of falling oil prices and economic sanctions imposed by the US and the EU.

"Ruble depreciation has paralleled the 30-percent price fall of Brent crude oil since the start of 2014. The ruble exchange rate will follow oil prices," Siluanov said.

Crude prices have slumped more than 30 percent since June and hovered near a four-year low, due to multiple reasons such as weakening demand of China and excessive production. OPEC ministers also plan to meet in Vienna, Austria, Thursday for coordination of their countries' policies.

Siluanov admitted that thanks to high oil prices in the previous years, the nation has lived more affluently than it could actually afford, suggesting Russians have to "tighten their belts".