Europe News

Russia's PM in warning over ‘deep recession’

Dmitry Medvedev, Russia's Prime Minister.
Andrey Rudakov | Bloomberg | Getty Images

Russian Prime Minister Dmitry Medvedev has warned that the country faces a risk of a "deep recession" if the government ditches its spending plans.

Speaking at a meeting of his party, Medvedev said Tuesday that the government won't retreat from its strategic aims and social spending. Otherwise, he said Russia could plunge into a "deep recession."

He also said the Russian economy is in a worse place now than in the 2008 crisis because "a number of countries are effectively hampering the development of our economy."

With oil prices sliding, Russia's energy-dependent economy is suffering. One manifestation of that has been the sharp fall in the value of the ruble. The currency is the worst performing currency this year, along with the Ukrainian, hryvnia, having lost nearly half its value.

The Russian government also told large state exporting companies on Tuesday that by March 1 they must bring their net foreign exchange assets back to the levels of Oct. 1.

The government said in a statement on its website that the instructions had been given to gas firm Gazprom, oil firm Rosneft, diamond miners Alrosa and Kristall, and oil company Zarubezhneft.

"These public companies will be required to submit a weekly report to the Central Bank of Russia on the amount of their net foreign exchange assets," the government said.

Reuters contributed to this report.