These five charts show why Russia is edging towards recession
It's not been a good year for Russia. Yesterday the country revealed it had lowered its growth forecasts, and is now expected to enter recession in the first quarter of 2015 – the first time in five years.
The deputy economic development minister Alexei Vedev announced the drop – from 1.2 per cent growth to a contraction of 0.8 per cent – citing the decrease in the forecast average price of Urals crude next year from $100 a barrel to $80 a barrel, according to Russian news agency Interfax.
Here are five charts that show exactly what is happening
1. Russia is heavily dependent on oil and gas when it comes to exports
It accounts for around 58 per cent of its total exports by value, according to the IMF.
To put that into perspective, the UK's biggest single category last year made up just 18 per cent of the total – and if you're wondering it was pearls, gems, precious metals and coins.
2. Exports make up a fifth of Russia's economy
In 2012, exports were worth $542.5bn to the Russian economy – around 20 per cent of the total. While that is less than the UK's (around 28 per cent of our total GDP), the focus on oil and gas means it is vulnerable to those price falls
3. Three of its top five trading partners are in the EU
The Netherlands, Germany and Italy will all be following the EU's sanctions that have been imposed for several months because of Russia's involvement in the Ukraine conflict. The sanctions are wide-reaching, and of course go for some of Russia's biggest companies (and wealthiest individuals).
In total those three European countries alone accounted for 27.6 per cent of Russia's exports in 2012. They are unlikely to have done so this year.
4. Foreign capital is flowing out of Russia
One part of the announcement today is a revision to the amount of foreign capital expected to leave the country this year and next. That is because of the falling oil price, and is another reason why the rouble is being pushed down.
5. The rouble's decline
Yesterday the Russian currency saw a huge decline, at one point dropping at its fastest rate since 1998, but it has been sustained over several months. This is more of an effect than a cause, but it does show just how closely the rouble is aligned to the price of oil.