Russia lowers 2015 growth forecast, amid oil price slump

Russia revised its economic growth projection for 2015, predicting a 3 percent contraction in its GDP, in the wake of a slump in global oil prices.

According to a Xinhua report, based on a presumed global oil price of $80 a barrel, the Russian economic development ministry had earlier estimated that the country's GDP would fall by 0.8 percent for the year. The revised projections have factored in the current oil price of around $50 per barrel.

"While consensus forecasts indicate higher estimates, we take the most conservative figures into account," said Russian Economic Development Minister, Alexei Ulyukayev.

The ministry also expects an annual inflation rate of 12 percent this year, compared with last December's projection of 7.5 percent.

The fresh estimates are part of the revised economic forecast for 2015 submitted to the government for approval.

Russia's ministry of finance will have to make a few adjustments for this year's federal budget because of the lowered economic forecast.

Ulyukayev defended the move by Russia's central bank Friday to cut the key interest rate from 17 to 15 percent, saying that it was "absolutely justified and necessary as it signified the financial stability risks have lowered".

The ailing Russian economy has suffered a lot owing to mounting pressure from Western sanctions and plummeting global oil prices. According to the Federal State Statistics Service, Russia' GDP growth dropped to 0.6 percent last year from 1.3 percent the previous year.