UPDATE 3: Min: Russia’s GDP to rise 0.2–0.3% 2016 if Urals at $43

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ST. PETERSBURG, Jun 17 (PRIME) -- The Russian gross domestic product (GDP) will rise by 0.2–0.3% in 2016 if the average oil price is U.S. $43 per barrel, Economic Development Minister Alexei Ulyukayev told reporters on Friday.

“I think that if the current market situation remains, and we have equally strong reasons to think that it will improve than deteriorate, so if we base on the current situation, there will be small growth, 0.2–0.3% of the GDP,” Ulyukayev said.

The minister said that a $40 per barrel oil forecast made earlier for 2017 can be revised.

“Because the situation is quite volatile. This year, we will submit the forecast to the State Duma (parliament’s lower chamber) on November 1; this is why we have a certain time gap to coordinate our projections of future with the reality.”

Ulyukayev said that budget deficit must be reduced by 0.5 percentage point a year so that it reaches 1.5% of the GDP by 2019, falling from the current 3.3 % of the GDP.

Russia can borrow up to 1.5% of the GDP on the domestic market in 2017–2018, the minister said. He also proposed to cap foreign borrowings at $3 billion at least for 2017.

“We have a bar at $3 billion, it would be nice to extend it for further years,” Ulyukayev said.

Budget investment must be protected by law as well as social spending, the minister said.

Finance Minister Anton Siluanov said that the idea to improve the oil price forecast is dangerous. “We have agreed to count at $40 per barrel as the basic forecast for the next three years,” he said. “The issue is that we must cushion the risks for the budget. If we count at $50, we will not leave room for maneuver and a reserve if oil prices fall.”

(65.8618 rubles – U.S. $1)

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