Ministry of Economic Development lowers expectations for Russian economy

The Russian Ministry of Economic Development has revised its macroeconomic forecast for the current year, envisaging an average annual oil price not at 50 dollars, as in the current base scenario, but at 40 dollars. In this variant, Russia's GDP will fall by 0.8%, compared to 3.7-3.8% in 2015, while still it is expected to grow by 0.7%, the Vedomosti newspaper writes with reference to the draft document.

The new version of the macroeconomic forecast, the forecast of inflation is increased from 6.4% to 8.5%. The incomes of the population will fall by 4% (in the current version – 0.7%), and retail trade turnover by 2.5% (currently it is projected to increase by 0.4%). The forecast for unemployment has increased from 5.8% to 6.3%.

Investments in fixed capital at an average price of 40 dollars per barrel will be reduced by 5%, not by 1.6%. Industrial production will decrease by 0.4% (it is still expected to grow by 0.6%).

The average dollar exchange rate in the new scenario is projected at the level of 68.2 rubles (63.3 rubles in the current forecast).

Earlier this week, the head of the Ministry of Economic Development, Alexei Ulyukayev, stated that the agency also prepares stress scenarios of the forecast with a price of 25 dollars per barrel, while not revealing its parameters, Interfax notes.