UPDATE2: Russian Econ ministry sees Russia’s GDP falling 0.8% in ‘15
(Adds further details in last two paragraphs)
MOSCOW, Dec 2 (PRIME) -- Russia’s Economic Development Ministry has cut its 2015 gross domestic product (GDP) forecast a to a fall of 0.8% from a 1.2% growth, and increased its 2014 forecast to 0.6% from 0.5%, Deputy Minister Alexei Vedev told reporters Tuesday.
“In the end our forecast for GDP growth in 2014 is revised to 0.6% from 0.5%, and the GDP estimate for 2015 is revised significantly – the current forecast envisages a 0.8% decrease,” Vedev said, adding that this estimation is connected with the continuing sanctions and investors’ uncertainty.
The ministry does not rule out the Russian economy entering a recession already in January–March 2015, while in April–June a rebound is possible. “In the first quarter we expect a decrease due to falling demand in the first place,” Vedev said, adding that in October–December 2014 the GDP excluding the seasonality may remain in the positive zone, and the recession in 2014 may be avoided.
He also said the ministry expects the Western sanctions to last for the whole 2015. “Oil prices and de-escalation of geopolitical tensions, or lifting sanctions in mid-2015, were the basis of our last forecast. Now we have worsened our estimations and suppose the sanctions will be kept through whole 2015.”
Due to the worsening macroeconomic conditions, the country’s budget will lose 50–90 billion rubles in 2015, or about 0.1% of GDP, Vedev said, adding that these estimates were made on the basis of an average annual ruble rate of 49 against the U.S. dollar and an average annual oil price of U.S. $80 per barrel.
On November 26, Finance Minister Anton Siluanov said the ministry estimates total budget losses in 2015 from poor external conditions, shrinking economy and imports of 1 trillion rubles. Later, Kirill Tremasov, head of macroeconomic forecast department at Economic Development Ministry, explained that such a differences between the ministries’ estimates may be based on them using different estimates of ruble rate and oil prices.
Vedev also said Russia’s imports and exports will decrease 19% to $263 billion and 12.7% to $432 billion in 2015, while in 2014 the ministry expects imports and exports to fall 2.2% to $310 billion and 2.3% to $500 billion respectively.
The forecasts for the current account for 2014 and 2015 were also revised to $56 billion from $61 billion and to $64 billion from $38 billion, Vedev added.
(51.8068 rubles – U.S. $1)