Monday, May 18, 2015

Economy of Russia in I quarter 2015 dropped by 1.9% – Russian Oil

«Oil of Russia», 18.05.15, Moscow, 11:05 The decline of Russia’s GDP in I quarter this year, according to the Federal State Statistics Service, was 1.9%. This is slightly better than the preliminary assessment of Economic Development (MED) – 2.2%, which was announced in late April. Last time quarterly GDP decline in annual terms was recorded in the IV quarter of 2009. “The negative impact on GDP had decline in trade, construction and the fall in exports of gas,” – said in its monitoring for January-March 2015 the Office of Alexei Ulyukayev.

Economic Development Ministry expects to strengthen the decline in GDP in the II quarter , explaining that the real economy out of the crisis for longer than financial markets. A year-end forecast decline in the level of 2,8%.

The corresponding foreign consensus forecasts look markedly more pessimistic. So, Bloomberg, at current oil prices, gives the figure of Russia’s GDP decline of 4%, the European Bank for Reconstruction and Development – 4.5%. In January the World Bank study, “Global Economic Prospects” said the likelihood of reducing Russia’s GDP by 2.9% in 2015. Curiously, while Brent crude oil cost $ 46 a barrel, and not 66 as it is now.

Meanwhile, the whole of last year, GDP grew: in I quarter the increase was 0.6% on an annualized basis, in the II quarter – 0.7%, in the III quarter – 0.9%, in the IV quarter – 0.4%. In total for 2014 had risen to 0,6%.

In its March report, IEG says that in 2016 the domestic economy is sure to be strengthened. Thus, the GDP will increase by 2.8%, inflation will slow down to 7-8%, while real incomes will rise by 1% a little. IEG expects the ruble in August-September 2015 almost regardless of the price of oil. In the case of the gradual lifting of sanctions – up to 40 rubles per dollar. The Ministry Alexei Ulyukayev also suggest that in 2018 the oil price may go back to 80 dollars per barrel. And even in a different scenario, to $ 100. If this forecast comes true, then the growth of the domestic economy probably will not take long.

In general, better than initial expectations the dynamics of the economy allows the authorities to make optimistic conclusions. “The constant appeals to the crisis already is inappropriate. It is necessary to move on to the agenda of development – recently said First Deputy Prime Minister Igor Shuvalov. – You can not say that everything is fine. But this crisis, on which we worked out all the activities of our anti-crisis plan and saw an increase in funding, the situation now is not “.

This assessment is not shared by all analysts. “I do not expect this year to a quick exit from the recession, as well as the growth of the economy – said” NO “Deputy Director of the Center for Development of HSE, Valery Mironov. – The fall in GDP in 2015 could reach 3-3.5%. The reasons – in the foreign exchange market and a high level of interest rates, which now is 12.5%, which does not stimulate the growth of the industry “.

As noted in the comments for” NO “Director of the Institute of Strategic Analysis FBK Igor Nikolaev, economic trends often mean much more than the absolute numbers. Especially in an economy like ours – inertial, vysokomonopolizirovannoy with underdeveloped institutions.

“The figure of 1.9%, which gives the Federal State Statistics Service, is not so critical, – said the expert. – It’s really important: downturn intensifies, our economy is sinking into a quagmire. The price of oil will rise to 80 dollars per barrel, they have stabilized, fingering the bar in 60-65 dollars. As for the Russian economy, these rates are extremely low, the government is forced to constantly refer to the Reserve Fund. “

According to Igor Nikolaev, it is a clear, though not landslide deterioration of the situation: “Crises are long, though not as deep as in 2008-2009, more painful and devastating in the end. Any kind of manifestation of optimism in this case is not justified “.

George Stepanov Read more on http://www.oilru.com / news / 461483 /

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