Russian Economic Development Minister Alexei Ulyukayev is trying to re-assure the Russian people who are looking at a hard as well as cold winter. For those without any training in economics, the argument seems plausible. Certainly, the levels of debt cited for Russia is low compared in Western countries who are in financial difficulties with debt up to the eyeballs.
The reality is that a significant number of major Russian businesses have foreign currency loans that are repayable in the short-term. Meanwhile, the Ruble has suffered devaluation from fears about sanctions. Russia has enormous natural resources for which the West is desperate but politics is impacting trade. Future development requires leading technology from the West and this is restricted because of sanctions.
I think that it is true that the man or woman on Russia’s streets will not directly see any affect from a Western rating agency downgrade. However, the Ruble will continue to depreciate and Russia’s businesses will struggle to secure foreign funding, technology, and scarce resources. Sanctions will mean less and less choice in Russia’s shops, with increasing prices.
In the end, I suspect that the Russian Government will continue to press their political interests. Rating agencies will be ignored and the Russian people will face increased hardship but this is not new.