Russia’s gross domestic product (GDP) may grow by 0.2% in 2017, by 0.9% in 2018 and by 1.2% in 2019, according to a baseline forecast by the Economic Development Ministry in the ministry’s adjusted 2017-2019 social and macroeconomic development forecast.
In 2016, GDP contraction will slow down to 0.6%, the ministry said.
The ministry based its baseline forecast on an average annual price for Urals oil at $41 per barrel in 2016, and at $40 per barrel in 2017-2019.
“The level of prices is rather conservative as it is significantly below the consensus forecast for oil prices”, the ministry said.
Still, Russian oil exports may grow in the period by 16 million tons by 2019, the ministry said, adding that the share of non-oil and gas exports in the combined exports will increase to 34.9% in 2015 prices.
But investment will contract by 3.7% in 2016, by 0.5% in 2017, and increase by 1.2% in 2018 and by 2% in 2019, the document read.
The baseline scenario also envisages a net private capital outflow from Russia to reach $18 billion in 2016 and to grow to $25 billion in 2019. But investment activity will stabilize, and an average annual growth of investments is expected at 1.6% in 2018-2019 on the basis of an increase of private investment and contraction of state investment, the ministry said.
The ministry also expects consumer prices to grow by 5.5% in 2016, by 4.3% in 2017 and by about 4% in 2018-2019.
Russia’s unemployment will stabilize at 5.9% in 2016-2017, and fall to 5.7% in 2019-2019. The number of working age people will fall, and workforce will also contract in the period by 1.2 million people to 71.5 million people in 2019 compared with 72.7 million people in 2016, the ministry added.
Russia’s gas tariffs for all categories of consumers and for transportation of gas may increase by 3% per year in 2017-2021, the ministry said, adding that the higher tariffs for transportation through the trunk pipeline will not be increased by the level above the increase of wholesale gas prices.
Russian Railways’ tariffs for cargo transportation and for passenger transportation in the regulated segment are expected to rise by 4% per year in 2017-2019, the ministry said.
Power prices for industry will rise by 3% per year in the three-year period, but tariffs for citizens will grow by 5% per year due to stop cross-subsidization in the sector. The growth of tariffs for some companies will be different in order to ensure their breakeven results, the ministry said. (Prime/Business World Magazine)
