Russia is more resilient to external economic shocks than most other countries-oil exporters, thanks to a flexible exchange rate and large foreign exchange reserves, according to Moody’s rating agency.
The agency expects a small budget deficit in 2020, which will account for less than 1% of GDP against a budget surplus of 5.3% of GDP in 2019, but the financial state of Russia is very robust with respect to large foreign-exchange reserves of the Bank of Russia that covers 90% of Russia's external debt against 55% in 2014
According to Moody’s, the countries with a balanced budget or a budget surplus in 2019 are in a better position, including Russia, Azerbaijan, Qatar and the UAE.
"The money accumulated in the national welfare Fund (NWF), which is 11.2% of Russia’s GDP, can cover the reduced revenues from the oil industry and maintain a strong financial situation in Russia," Moody’s reported.
The agency also lowered forecasts of the prices of Brent crude oil in 2020 by 30% to $40-45 per barrel in 2021 by 15% to $50-55 per barrel. In addition, Moody’s believes that the global demand for oil will start to recover in late 2020.
However, the national debt of Saudi Arabia will increase in 2020 up to 30% of GDP, Oman — up to 70% of GDP. The national debt of Kuwait will also increase, Bahrain and Iraq will also face a significant increase in debt, Moody’s concludes.
