Economy ministry says cuts 2018 GDP growth outlook to 1.8% from 1.9%

MOSCOW, Sep 5 (PRIME) -- Russia’s Economic Development Ministry has reduced the 2018 gross domestic product (GDP) growth to 1.8% from 1.9% and for 2019 to 1.3% from 1.4%, according to a report published on Wednesday.

The GDP rise in January–July is estimated at 1.7% and in July at 1.8% on the year after 1.1% on the year in June.

Recovery of the manufacturing sector after temporary negative factors have faded contributed to a quicker GDP expansion.

The ministry said it changed the outlook for 2019 due to a moderately strict monetary policy by the central bank and a shift of an active stage of national projects towards June–July with the tax burden rising from January 1.

The Urals oil blend average price forecast for 2018 was raised to $69.6 per barrel from $69.3 per barrel. The 2019 forecast is $63.4 per barrel on the back of a fast rise of production in the U.S. and a gradual rise in OPEC and Russia. The Urals price is to fall to $59.7 in 2020 and to $53.5 in 2024.

The ruble rate against the U.S. dollar can return to 63–64 in July–December 2019 and will continue to weaken gradually after that.

Investments growth forecast for 2018 was reduced to 2.9% from 3.5%, as the figure fell to 2.8% on the year in April–June after 3.6% in January–March.

The net capital outflow forecast rose to $41 billion from $18 billion.

The ministry also said that it sees no reason to revise the long-term development trends.

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