Nabiullina told about the three difficult years for the economy of Russia – TASS

MOSCOW, November 14. /TASS/. The next three years external and internal conditions for the Russian economy will be difficult, said the Chairman of the Bank of Russia Elvira Nabiullina at a joint meeting of committees of the State Duma on the financial market, on budget and taxes and Committee on economic policy, industry, innovative development and entrepreneurship.

“We expect that the next three years, the external conditions for our economy will unfortunately remain difficult, and internal conditions are difficult, we don’t wait until a significant restructuring of the economy and increase its potential,” she said.

the Bank of Russia assesses the potential pace of economic growth below 2%, if not carried out structural changes.

“Potential growth rates are estimated below 2%, if not carried out structural changes. Therefore, the most important result of adaptation of economy to new conditions is that the economy is starting to find a new model of development, and the task of the Bank is to support this process, to ensure stable financial conditions for forming domestic sources of investment,” said Elvira.

economic Recovery

Nabiullina noted that the recovery of the Russian economy can be stretched over time, unlike the crisis of 2008-2009, the Central Bank expects a slight GDP growth in 2017.

“Now, the recovery can be stretched over time as the factors (economic growth – ed.) should be different than before the fall in oil prices. We all know this, and are talking about changing the behavior of the economy, the model of its development. To date, there have been signs of economic recovery, and in the following year the Bank of Russia expects a slight GDP growth, but we see that processes in different sectors and different regions are very unstable,” – said the head of the regulator.

oil Price

Also, the Bank of Russia believes that the price of oil at $ 40 a barrel will remain for three years.

“We are considering several scenarios (economic development – approx. ed.), our baseline scenario envisages $ 40 a barrel within three years,” she said.

While the price of oil is at about $ 40 per barrel. The cost of the futures on Brent crude oil with delivery in January 2017 in the course of trading on the ICE exchange in London fell 1.8% to $ 44,96 per barrel. In recent times the price of this oil was below $ 45 per barrel on 9 November.

Oil falls amid lower Organization of countries – exporters of oil (OPEC) forecast for growth in global oil demand in 2016 to 10 thousand barrels per day. In accordance with the updated forecast of oil demand this year will increase in comparison with the year 2015 by 1.23 million barrels per day.

in addition, the Central Bank is assessed as a low probability risk scenario price of oil $ 25 per barrel.

“the Probability of a risk scenario we are now considering how low,” said Elvira.

growth of export of Russia

the Head of the Central Bank said that the Bank of Russia predicts a low growth rate of export of the Russian Federation and the beginning of recovery of imports with increasing domestic demand.

“the Pace of export growth will remain high, including because we expect a conservative price of oil. The structure of the economy will be as long as the inertia to remain with a large share of oil and gas exports and imports will recover slightly along with the recovery in demand. We now see that restored investment import, and hope that it will affect the growth of production”, – said Nabiullina.

Indexation of tariffs

Nabiullina said that the indexation of tariffs of natural monopolies inflation creates a risk of the tightening of monetary policy (DCT).

“If the growth rate of tariffs for services of natural monopolies will be above inflation, we are forced to maintain a tighter monetary policy that is not reflected in inflation. If, as suggested by the government, the growth rate for services of natural monopolies will be less inflation, of course, this creates more opportunities for easing of monetary policy,” she said.

lower rates

Nabiullina believes that too rapid a decline in rates is unreasonable and could lead to a resurgence of inflation.

“Too fast a reduction of interest rates, unreasonable fundamental economic trends that may lead to a resurgence of inflation. This means that such a decline in interest rates we will ease the conditions of doing business, but do it at the expense of impoverishment of the population,” – said the head of the Central Bank.

According to her, the idea of too rapid decline in interest rates threat. “I have repeatedly said, but I would like to emphasize again that the ideas are too rapid reduction of interest rates by pumping up the economy with cheap money, on concessional financing of selected of selected projects, in our view, dangerous,” said Elvira.

“This could lead to higher inflation, depreciation income and the depreciation of the savings of the people, further growth in the debt burden of enterprises, which poses risks to economic stability and may even lead to financial bubbles, their bursting and so on,” she added.

the CBR in the implementation of the baseline scenario can continue to reduce the rate in 2017.

the Central Bank expects to maintain sanctions and slow growth in the world economy.

Surplus liquidity

Nabiullina believes that the surplus liquidity of Russian banks in the coming years will continue and deepen, amid continued budget deficit will require increasing public debt.

“Now we almost moved to a situation of surplus liquidity, and subsequent years, in our estimation, it will only persist and deepen. We see that the budget deficit will soon require increasing public debt. This may have an impact on long-term, the borrowing rate and the borrowing rate for the private sector. Next year, the budget assumes a two-fold increase in government borrowing, and, of course, we must be very careful, should be all under control”, – said Nabiullina.

Previously the Bank of Russia said that the transition of the banking sector surplus liquidity can occur in early 2017. In a situation of surplus liquidity, banks do not feel the need to attract funds from the Central Bank can lower interest rates on deposits, and then to mitigate price and non-price lending conditions during the key rate unchanged.

Deputy Minister of Finance of Russia Maxim Oreshkin said that the surplus liquidity in the banking sector does not carry the negative, but the dynamics of the liquidity situation must be predictable in the future.

capital Outflow

According to Nabiullina, the Bank of Russia expects capital outflow from Russia in 2016 is at least $ 20 billion in the forecast period (2017-2019 biennium.) – $ 25 billion a year.

“the Pace of export growth will remain low, including the fact that we expect conservative oil prices, and the structure of the economy will persist until inertial, with a large share of oil and gas exports and imports will recover slightly along with the recovery in demand. And we see that now recovering investment import, I hope that this is reflected in the increase in production. At the same time, capital outflow will remain at a low level, throughout the forecast period with about $ 25 billion, this year we expect less than $ 20 billion,” she said.