Russia’s recession is not over yet and the gross domestic product (GDP) growth will be limited to 1-1.5% over next five years even if oil prices are high, the Analytical Credit Rating Agency (ACRA) said in a revised economic forecast until 2020.
“The social and economic statistics for January-July shows that the recession is not de facto over”, ACRA said. “Production of mineral resources, trade, construction and other basic types of activity have been falling over the last five months”, the agency said.
ACRA analysts believe the recession can last until early 2017. The Russian economy will fall by 1.5% this year and by 0.1% next year. GDP will switch to 0.5% growth in 2018 and will rise by 0.7% in 2019 and by 0.9% in 2020.
The average annual Urals oil blend price will stay at $41 per barrel in 2016, $43 in 2017, $44 in 2018, and $45 in 2019-2020.
Russia’s federal budget deficit will reach 3.9% of GDP in 2016 and will gradually decrease over next few years. It is expected at 3.1% of GDP in 2017, 2.2% in 2018, 1.5% in 2019, and 0.7% in 2020.
ACRA also improved its forecast for the annual average ruble rate in 2016 to 68 rubles per dollar from 71 rubles expected in March.
The annual average key rate is expected at 10.6% in 2016 compared to 9.6% projected in March. At present, the central bank’s key rate stands at 10.5%.
Russian citizens’ incomes are projected to fall by 4.1% in 2016, by 1.1% in 2017, and by 0.8% in 2018 and will switch to 0.6% growth in 2019 and increase by 1.1% in 2020, ACRA also said. (Prime/Business World Magazine)
