Washington: The US today said that Russia is facing a serious economic situation in view of a sharp decline in Russian currency and attributed this to a series of international sanctions imposed by Washington after Moscow's actions in Ukraine.
"The combination of our sanctions, the uncertainty they've created for themselves with their international actions and the falling price of oil has put their economy on the brink of crisis," White House Chairman of Council of Economic Advisors, Jason Furman, said.
"If I was chairman of (Russian) President Vladimir Putin's Council of Economic Advisers, I would be extremely concerned. They are between a rock and a hard place in economic policy," he said.
"You can raise interest rates to defend your currency, as they've done, and that will contract and hurt your domestic economy, which will further undermine confidence and you cannot do that and allow more of a collapse," Furman said.
"So I think they are facing a very serious economic situation and 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," he said.
The Chief Economic Advisor said even if nothing was going on in Russia, there are a number of challenges that a number of trading partners are facing.
"The Japanese economy has contracted in three out of the last four quarters. That has little, if anything, to do with the Russian economy, but that does act as a headwind to the US economy in the trading relationship we have," said Furman.
"Growth in Europe has slowed nearly to a halt, and the IMF has put the odds of another recession at 40 per cent for Europe. Their analysis and a lot of other analysis, that's not primarily because of Russia, that's because of weak domestic demand in the euro zone and the need for both some combination of, you know, fiscal and monetary policy to address that weak demand," he said.
Furman said that a number of emerging markets have also slowed, places like China, that are much bigger trading partners for the United States and much more important in the global economy than Russia is.
"So I certainly think the US economy does face a challenge and a headwind from slowdowns around the world. I just wouldn't locate that primarily in Russia.
“The answer to that is to continue to strengthen ourselves domestically, while engaging, as you saw the President did at the G-20, to help our partners strengthen their economies," he said.
