Monday, August 15, 2016

VEB predicted strengthening of the ruble in 2020 – Interfax

Moscow. August 15. INTERFAX.RU – Rising oil prices and an increase in exports from Russia would lead to a significant strengthening of the ruble in the coming years, and in 2020 the average dollar exchange rate could reach 52.8 rubles, according to the updated baseline scenario Vnesheconombank macroeconomic forecast 2016-2020.

In the years 2017-2020 with rising oil prices and the softening of monetary policy (lower interest rates), the Russian economy will go to growth. It is expected that the increase in oil prices and the availability of credit will increase the confidence of both investors and consumers. As a whole for the period 2017-2020 years the average annual GDP growth of about 1.6%. Due to the increase in export earnings in the medium term is expected to strengthen the national currency to 52.8 rubles in 2020. Against the background of strengthening the national currency, a moderate recovery in consumer demand and limiting indexation infrastructure companies inflation to fall to 4.9% in 2017 and beyond will not exceed the level of four percent, reaching thus the target value of Bank of Russia “, – analysts describe VEB a baseline scenario of the forecast (for the macroeconomic forecast VEB meets former Deputy Minister of economic development Andrei Klepach).

The VEB expects an annual average basis in 2016, the dollar can cost 67-67,9 rubles, while maintaining its cost . in the second half of the year at around 65-66 rubles in 2017, the bank’s analysts predict the average dollar exchange rate at the level of 60.2 rubles, in 2018 -. 55.3 rubles, in 2019 -. 53.5 rubles,. 20120 year – 52.8 rubles

Vnesheconombank raised its forecast for the average price of Urals oil in 2016 from $ 35 to $ 40-41 per barrel in 2017 VEB economists predict the price of oil at $ 51 level.. 2018 – $ 55, in 2019 – $ 56, in 2020 -. $ 57

“Urals Quotations rose from $ 32 in the first quarter average of $ 44 in the second quarter, and the average June came close to $ 47 in the second half is more likely correction of weak oil prices down due to the incipient increase in the number of active rigs in the United States at the continuing excess of oil on the market. OPEC member countries have not been able to agree on the levels of oil production. At the same time it increased the likelihood that the producers of shale oil can wait with active build-up of production in the face of increased turbulence in global markets due to the British decision to withdraw from the EU. In the years 2017-2020 with an increase in the pace of global economic growth in the oil price may be fixed in the range of $ 50-60 per barrel, “- noted in the report

.” The Russian economy is in the middle of the year went to the turn, which is characterized by termination of the recession and the transition to an unstable stabilization and then a weak recovery. Although the storm is not over yet, the light at the end of the tunnel is in sight. The main stimulus to revive is higher than at the beginning of the year, the level of oil prices and export growth both hydrocarbons and raw materials. On the other hand, investment and consumer demand continues to shrink, and broken their dynamics will at best only at the end of the year “, -. Said in a report on the current situation in the economy

According to the Vnesheconombank, the second GDP quarter decreased by 0.1% compared to the first quarter (adjusted for seasonal factors).

“In general, the quarterly GDP decline observed over 8 quarters in a row, during which the economy has lost 5.2%. For comparison, during the 2008-2009 crisis, the recession lasted for only three quarters, and the economy of the reduction was more than 2 times stronger – almost 11% “, – stated in the report

.” We We expect that the economy can grow in the third quarter of 2016. The main revitalizing factor that is likely to be agriculture, which is expected to record high grain harvest. Dynamics of Agriculture can provide in the third quarter of additional GDP growth by 0.2-0.3 percentage points, but the effect will be temporary and be exhausted by the end of the year. The transition to a more sustainable growth phase can be expected no earlier than 2017 in the case of an increase, the price of oil, “- said in the review VEB

According to the Vnesheconombank, Russia’s GDP in 2016 decline by 0.6-0.7. % (Economic Development Ministry official forecast – a decline of 0.2% – IF). in 2017, analysts expect VEB Russian economic growth by 0.7% (Ministry of Economic Development forecast – 0.8% growth), in 2018 – 1.5 % (growth by 1.8%), in 2019 – by 1.8% (growth by 2.2%), in 2020 -. to 2,5%

“in the basic version of the forecast economic recovery in the years 2017-2019 (average annual rate of 1.3%), which will be based largely on the growth of world oil prices, will compensate for the crisis recession. In 2020, the growth rate could rise to 2.5% “, – the report says VEB

.” This option is lagging behind the development of world economic growth and, consequently, a certain weakening of Russia’s economic positions in world. However, there is significant opportunity to accelerate growth in the medium term of 3-4% due to accommodative monetary and fiscal policies aimed primarily at improving the conditions for investment, “- noted in World Economy

<. p> “The low capacity utilization and the relative excess of national savings have the potential to accelerate the growth of the Russian economy in the medium term to 1.0-2.0 percentage points To realize this potential need to increase the level of entrepreneurial confidence (optimism), including: by stimulating monetary and fiscal policy “- said in a report on a moderately optimistic forecast variant

.” This scenario assumes more rapid easing of the monetary policy in the next two years, despite a slightly higher inflation rate than laid in targets. For long-term economic competitiveness are offered additional to the baseline scenario costs, aimed at improving human capital and the development of scientific activity, “- noted in VEB

stated in the bank that in the baseline scenario for oil prices and. increase in export earnings will lead to a significant strengthening of the ruble. “In nominal terms, the average ruble rate for the period 2017-2020 years will strengthen against the US dollar by 22%. At the same time, the real effective exchange rate will grow even stronger (more than 30%). This will worsen the financial performance of companies and lead to the loss of competitiveness of the industrial and tourism sectors “, – describe the intelligence VEB negative effect of the strengthening of the ruble

.” To mitigate these effects, in a moderately optimistic scenario, the Bank of Russia policy partly reoriented to the goal of reducing inflation to 4% towards deterring the ruble due to interventions in the foreign exchange market. Purchase of Central Bank currency retained throughout the forecast period, in order to contain the ruble and increase reserves to the target level of $ 500 billion in 2020, an increase of almost $ 85 billion more than in the baseline scenario. Under these conditions, strengthening of the ruble will be more lenient, and in 2020 the dollar exchange rate will be 62 rubles to 53 rubles per dollar in the baseline scenario and in real terms, the ruble strengthened by 2020 by 14% compared to 2016 “, – offer VEB measures to weaken the ruble.

The bank pointed out that the beneficiaries of a weaker ruble exchange rate will perform the budget for which any ability to reduce size of the deficit, and the company, whose profits will be higher because of the possibility of price increases and foreign exchange revaluation of . savings “main defeated party there will be households whose real wages will grow slower due to higher inflation,” – said about the cons of a weaker ruble to the population

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