Russia to Use 2.3 Trillion Roubles To Boost Economy

Russia is spending 2.3tn roubles (£22bn) to shore up its economy as sanctions bite and after its debt was downgraded to junk.

The government also intends to create a bad bank to house the most troublesome loans held by the country’s embattled banking sector and inject more money into investment projects.

Around 60 measures were announced in total, with the National Wealth Fund – a sovereign wealth fund – putting 300bn roubles into the state development bank, Vnesheconombank, to increase lending.

The moves, announced by Russia’s finance minister Anton Siluanov, come amid signs that the sanctions imposed by western countries following Russia’s intervention in Ukraine, along with the low oil price, are starting to hurt the economy.

As one of the world’s biggest exporters, Russia is feeling the impact of the fall in the value of oil to $50 a barrel – a more than halving in the price in six months – and the central bank has warned that GDP could shrink by as much as 4.8% this year if oil prices fail to recover. Official data is due out on Monday.

via The Guardian

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