By Emre G├╝rkan Abay
Russia Letter

Russia started February with a visit from the Venezuelan Oil Minister Eulogio Del Pino, while low oil price pressure still haunts its economy.

Del Pino and Russia’s Energy Minister Alexander Novak agreed that OPEC and non-OPEC oil producing countries should hold a meeting to discuss low oil prices. However statements from other officials of oil producing countries hint that an agreement on oil markets is still far from being realized.

Another important statement last week came from Russian Economy Minister Alexey Ulyukaev,

Pointing out that Russia’s Central Bank could drop the 11 percent key rate in 2016, the minister did not disclose when this is likely to happen this year.

Unemployment figures announced on the first day of February was another “source of concern” for the Russian economy.

According to the statistics announced by the Ministry of Labor and Social Security, during the week of Jan. 20-27, the number of registered unemployed people in Russia increased by 3.4 percent, reaching 1.1 million people.

The negative view of the Russian economy is shared by international credit rating agencies.

Fitch Ratings has downgraded its forecast for the contraction of Russian economy in 2016 from 0.5 percent to 1 percent. The agency has also pointed out that if oil prices remain at such low levels, Russia would have to increase taxes on oil exports, as well as in its public spending.

Research conducted by an Economics Expert Group lead by Evsei Gurvich and Ilya Prilepsky, was another story from last week that made the headlines.

Western sanctions and the fall of oil prices during the period of 2014-2017 will cost Russia $600 billion, according to the research, while the sanctions imposed against Russia by the U.S. and the EU, due its activities in Ukraine, will cost around $170 billion while the drop in oil prices will cost some $400 billion.

The research also stressed that capital outflow in the country during the same period would amount to $280 billion, out of which $85 billion would be direct investment.

The Russian market is waiting for the foreign trade balance figures this week, which is currently at $9.1 billion.

By Emre Gurkan Abay in Moscow

Anadolu Agency

09 Feb,2016