Dmitry Piskulov: "Economists are optimistic about 2017"

Chairman of the Board of the National Currency Association (NCA), Dmitry Piskulov, speaking to Vestnik Kavkaza, summarizes the main results of the outgoing year.

- Whether has the Russian economy managed to cope with the crisis this year?

- In general, it is managed in many ways. We have stopped the decline in industrial production and the GDP decline, moreover, we expect that next year the economy will be able to show small growth. The monetary authorities are coping with inflation, which has dropped to quite low levels, which allowed the Bank of Russia to reduce this year's interest rates, although they remain relatively high in comparison to most countries. This was done in order to create a real positive interest rate as an additional incentive for production and business to work under real rates that are higher than the nominal inflation. The fiscal performance have improved, in general, there is no problems with the completion of the budget-2017, as its project was based on the price of $40 per barrel, and now it is above $50 per barrel. If this trend continues, at least in the case of stabilization at $50, the federal budget will receive additional resources to invest in infrastructure projects and construction. And that, ultimately, can lead to the demand in related industries.

Macro-stability was achieved, in particular because the exchange rate was stable enough through the whole year, ranging from 62 to 67 since April. Now, the ruble is being strengthened due to high oil prices. This, of course, concerns the authorities, but make people and importers happy. Of course, many of the phenomena still exist: there is still no major infrastructural transformation of the economy - it is natural, but there are no strong government actions, even though it currently supports small businesses, regional businesses and banks. At the same time, the role of non-commodity exports and, in general, the share of non-primary sectors of the economy increased due to the sanctions, which is the result of import substitution and the high dollar exchange rate. The main thing now is to fix these trends. In general, economists are more optimistic about the next year than about the current, although it is early to say that we expect rapid growth.

- What sectors of the Russian economy have proved to be the fastest growing this year?

- Those sectors with a focus on domestic consumer demand. In particular, domestic tourism has shown growth, as well as agricultural production. The chemical industry was rather successful, so we have some backlogs, which can be developed.

- What has helped the ruble to be of a relatively high value during all this year, despite the analysts' forecasts of its imminent fall?

- In fact,  this year we still had to deal with a wave-like movement of the ruble, which is called the volatility of the exchange rate, but this time the waves were small, as the ruble had strengthened. The ruble strengthened due to a reason, traditional for all the countries with export-oriented economies such as Germany, Japan and Russia: we have a positive balance of trade, we sell abroad more than we buy. Balance of capital movements may be different, depending on the political and economic reasons, such as investment in securities, or the purchase of foreign enterprises, but on such basic things as foreign trade, we have positive balance. This means that the country receives more foreign exchange earnings than it spends. In the context of secret control, or rather, the Bank of Russia's true attention to exchange rates, there have been talks with importers and exporters since 2015 on the saturation of the foreign exchange market, to avoid an imbalance in currency supply and demand, its receipt and expenditure. Therefore, during 2016 the inflow of currency into the market from the sale of foreign exchange earnings by exporters constantly exceed the purchase of currency by importers, and this is one of the factors which, one way or another, have put pressure on the dollar towards declining, and on the ruble - towards strengthening for the whole year. Moreover, this is the major factor for today.