Like the rest of the world, Russia's economy is feeling the pinch of low oil prices.
On top of Western economic sactions received by Russia when Crimea was annexed to the country from Ukraine in Mach 2014 and low oil prices (at below $30 a barrel), its economy has been struggling more says, International Business Times (IBT).
A local report made by The Moscow Times, which came out Tuesday said that an almost 30 percent drop was recorded in Moscow's housing market last year. Coincidentally, it was the same day the International Monetary Fund (IMF) downgraded its economic forecast for Russia. It is a double whammy.
Moscow once had a booming real estate market but a considerable slow down has been felt due to Kremlin's plans for long-term low oil prices. Last year, more than 113,000 aparments, excluding newly built ones have been sold in the capital but it is way below compared to 162,000 units the year before, IBT, based on a report released by another newspaper, Vedomosti. In addition, even the sector for new buildings was below the expected outcome, compared with 2014, apartments sold in 2015 was down by 18 percent.
Meanwhile, the Ruble is also on its all-time low rate against the Euro. Moscow, once part of the elite list of the most expensive cities to live in has dived from rank 9 to 50th, with the Ruble spiraling down.
According to Reuters, Russia's economy would contract by one percent in the next year based on IMF's forecast. The previous prediction was 0.6 percent contraction. It was done in the last quarter last year when the oil was still priced above $40 a barrel.
Russia's 2016 budget to oil prices this year is $50 a barrel bit to balance the budget, the prices will need to go above $80 a barrel accroding to the country's Finance Minister, IBT concludes.
