PRESS: Russia cuts 2016 economic forecasts, GDP to fall 0.8%

MOSCOW, Jan 15 (PRIME) -- The Russian government has revised the gross domestic product (GDP) estimate for 2016 to a 0.8% contraction from a 0.7% growth, business daily Vedomosti reported Friday, citing documents of the Economic Development Ministry.

Alexei Ulyukayev, economic minister, earlier said that the government can revise its GDP forecast because oil prices continued to decline in January. The new figures will be made public in January, he said.

Vedomosti reported that the new average ruble rate estimate is 68.2 per U.S. $1, inflation is 8.5% and capital outflow U.S. $50 billion.

A government official told the daily that the new estimates will become the basis for the 2016 budget plan.

According to the ministry’s draft report, Russians will continue to get poorer: real wages will fall 3.5% and people’s income 4% compared to a 0.2% and 0.7% fall forecast earlier. Unemployment projections rose to 6.3% from 5.8%. As the result, consumption, which was earlier supposed to drag the economy out of the crisis, will fall by 2.5%.

Industry will continue shrinking by 0.4% in 2016, while the ministry earlier estimated a 0.6% rise. Investments will slide 5%.

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