Russia’s economy is contracting as the effect of collapsing oil prices and international sanctions begin to take their effect on the energy-dependent country.
Russia’s economy ministry announced Monday that the nation’s gross domestic product shrank by 0.5 percent year-over-year in November, the first such decline in five years.
The nation’s economy has been buffeted as oil prices have dropped by nearly half and other energy prices have decline since the summer.
Monday’s announcement put further pressure on the ruble, which was up 7 percent versus the dollar as of Monday morning.
In recent weeks, the Russian government has taken drastic steps to stave off a collapse in the currency, which has fallen by more than 40 percent against the dollar this year.
Finance Minister Anton Siluanov said Friday that the country could fall into a recession in 2015 if oil prices remain near $60 a barrel. He told journalists that gross domestic product could shrink by 4 percent and that the deficit could exceed 3 percent of GDP, according to Reuters.
The Russian economy also has been dented by sanctions imposed by the United States in the wake of Russia’s aggression and military incursions in Crimea and eastern Ukraine throughout the year.
U.S. officials have cheered the effects of the economic sanctions that are now limiting President Vladimir Putin’s ability to respond to the looming economic downturn.
Russia’s government is caught “between a rock and a hard place in economic policy,” Obama economic adviser Jason Furman said at a mid-December press briefing.
“It’s a serious economic situation that is largely of their own making and largely reflects the consequences of not following a set of international rules,” Furman said.
