According to Aide of the Russian President, High Oil Prices Negatively Affect Development of Russian Industry in General

In his interview to RIA Novosti Andrei Illarionov, aide to the Russian President on economic matters opined that high oil prices in the long-term perspective were negatively affecting development of Russian industry in general.

According to him, the present high crude oil prices, including prices on the Russian "Urals" brand, at global energy markets are to be considered from two points of view: factor of time and influence of that factor on various sectors of the Russian economy.

Andrei Illarionov stressed that in the short term high oil prices were profitable for the Russian budget as they were intensively replenishing its revenue item. In the long-term perspective they were unprofitable as they negatively affected different spheres of the Russian economy, especially those which were not related to oil and petroleum-extracting industries.

The aide to the Russian President reported that annual oil production growth in Russia amounted to 8-9%, while industrial production output in the last several months decreased by 15%. He stressed that one might conclude that presently the Russian economy stopped its development.

In addition to that, in his opinion, there was another negative aspect of high crude oil prices consisting of practical lack of counteraction to growth of real exchange rate oriented towards prices being formed in the area of raw materials, particularly, oil resources.

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Author`s name Editorial Team