Russia to become another country in 2017

The official rate of the euro against the ruble set by the CBR for the weekend and on Monday is down by 1.29 rubles to 75.0469 rubles, the dollar fell by 97 copecks, to 66.4779 rubles. Meanwhile, the ruble is a currency which is dependent on oil, and the oil price can drop on expectations of the US Federal Reserve raising rates.

The Ministry of Economic Development has made an updated macroeconomic forecast. Its conservative variant  assumes that within three years the dollar will exceed 75 rubles, with the price of oil at 40 dollars per barrel.

Sergey Hestanov, Advisor on Macroeconomics to the Director General of the Opening brokerage house said ‘’the most important thing is to evaluate the consistency of the initial conditions, since most of the economic projections are made by simple extrapolation. Therefore, if the parameters laid down in the forecast will actually occur, then, respectively, the forecast results will be consistent with its conclusions. Judging by the figures which were announced, a decline is expected in oil prices to the level of 40-43 dollars per barrel. Rather, it is a baseline scenario, since it is a pessimistic scenario, the range will be 30-40 dollars per barrel. The forecast will be executed with a probability of about 80%. But due to the fact that the global economy is quite far from equilibrium at the moment, rather strong deviations are possible both for the better and for the worse."

Mikhail Delyagin, Director of the Institute of Globalization Problems, economist believes that, in fact, ‘’this is really not so much a forecast, but an assumption that the exchange rate will be determined by budgetary considerations. At $40 per barrel, the dollar will be 75 rubles, because it is necessary for the federal budget. In principle, this is true. Most likely, I think, it will be so, perhaps, even more expensive, after all, but it has its reasons. But we will see 70 rubles per dollar by the end of the year for sure, maybe even 75 ".

Delyagin does not see in the forecast a number of quality things: ‘’We are told that after some time everything will be better. And why will everything be better? Will the oil price rise? That is, the Russian economy is not seen as something that exists independently with its internal laws. There is oil, there is a growth rate, and there is a direct link. The Ministry of Economic Development does not consider any other factors, in addition to the global price of oil. For this reason they consider the qualitative changes that lie ahead. We do not have, at present, a Russia of 2017. We have no such prospect. Until that time, we either fall into a systemic crisis, or radically change the social and economic policies, which is unlikely, respectively, in any case, it will be another country with other qualitative regularities in the economy, with other rules of the game.’’