PRESS: Russian min offers to base ‘17–19 budget on $50–55 oil price

MOSCOW, Aug 30 (PRIME) -- Russia’s Economic Development Ministry has offered to base the budget for 2017–2019 on a U.S. $50–55 per barrel oil price forecast, business daily Vedomosti reported on Tuesday, citing four government officials.

The basic forecast of the ministry includes an average oil price of $40 per barrel in 2016–2019 but the ministry wants a more optimistic $50 forecast for 2017, and $55 for 2018 and 2019 to be made the budgetary basis, the daily reported.

One of the officials said that the reason for the “basic plus” forecast introduction is that a budget balance cannot be found with a $40 oil price estimate.

A representative of the Finance Ministry declined to comment on the information. A representative of the Economic Development Ministry told Vedomosti that the government’s commission on budgetary plans will consider an adjusted oil forecast in late September.

GDP forecast

The Economic Development Ministry also worsened its basic forecast for Russia’s gross domestic product (GDP) in 2016 to a 0.6% decrease from a 0.2% fall, the daily reported.

The basic forecast envisages that the country’s GDP will rise by 3.8% by 2020 as compared with 2015, while the “basic plus” forecast implies a 5.8% GDP rise over the period.

“According to the ministry’s estimates, there was a small slowdown in the economy in July, namely, an acceleration in its decrease (as compared with the same months of 2015). In accordance with the data, the seasonally adjusted GDP decreased again in the beginning of the third quarter (July–September) after stabilization at the zero point in the second quarter (April–June),” Vedomosti reported.

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