Russia’s economy ministry and central bank revise their forecasts

BOFIT Viikkokatsaus / BOFIT Weekly Review 2015/38

Both the economy ministry and the CBR have lowered their forecast assumptions on the oil price after the price had decreased since mid-summer. The economy ministry now assumes that the price of Urals-grade crude oil will average just $50 a barrel both this year and next. It further expects GDP to contract by 3.6 % this year, slightly more than in its previous forecast. Despite low oil prices, the economy ministry forecasts GDP growth of nearly 1 % in 2016.

The CBR’s latest forecast assumes an average oil price of $52 a barrel this year and $50 in 2016–2017. The CBR forecasts GDP will contract this year by 3.9–4.4 % and by 0.5–1 % in 2016. The central bank expects it will take at least two years for private consumption and fixed investment to recover from their large declines this year. The CBR notes investor sentiments would remain negative on Russia. In the CBR forecast, Russian imports contract this year by about a fifth and recover only after a couple of years.

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