Russian finance ministry sees inflation at 5.7% in 2016

MOSCOW, Sep 14 (PRIME) -- Russia’s Finance Ministry expects consumer price inflation at 5.7% in 2016, Deputy Minister Maxim Oreshkin said at a conference on Wednesday.

“5.7% - this is the level that we expect for the end of the year, this is the historical minimum of inflation in Russia,” he said.

“It is clear that economic agents now have less and less doubts that the target of Russia’s inflation of 4% next year is achievable,” he said.

The Finance Ministry earlier provided a forecast of 5.5–6% inflation in 2016. The central bank expects consumer prices to increase 5–6%. The Economic Development Ministry’s official forecast implies inflation of 6.5%, but the ministry’s representatives said earlier inflation will be below 6%.

The Russian budget can now be balanced only at the oil price of U.S. $80 per barrel, and the budget policy is aimed at balancing the budget at prices of $40–50 per barrel, Oreshkin also said.

“What we have to do over the next three years is to continue a way to reduce the oil price, which balances the budget, to move towards $40–50 per barrel. The good news is that we have already made half of the way – decreased to $80 from $110. We will now continue this movement,” he said.

The Finance Ministry plans to significantly boost domestic borrowings in 2017–2019, Oreshkin also said.

He also said the ministry had not revised the estimate of proceeds from privatization in 2016.

Finance Minister Anton Siluanov said in July the government expects to receive 900 billion–1 trillion rubles from privatization of stakes in oil companies Rosneft and Bashneft, uncut diamond monopoly ALROSA and other firms in 2016. The government already received 52 billion rubles from selling a 10.9% stake in ALROSA.

(64.8102 rubles – U.S. $1)

End