UPDATE: VEB official: Russia’s 2016 GDP can fall 0.7%, 2017 rise 0.7%

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MOSCOW, Sep 7 (PRIME) -- Russia’s gross domestic product (GDP) can decline by 0.7% in 2016 if the oil price averages U.S. $40 per barrel and grow by 0.7% in 2017 if the oil price is $51, Andrei Klepach, chief economist at Vnesheconombank (VEB), said at a forum on Wednesday.

“We expect (a GDP decrease in 2016) by 0.7%, the Economic Development Ministry sees it at 0.6%,” Klepach said.

The official also said that he forecasts a U.S. $51–55 per barrel oil price, or even higher, on average in 2017 because of an agreement between Russia and Saudi Arabia to support stability on the oil market.

Inflation will likely fall to below 6% in 2016, and the key rate can fall beyond 10% by the year’s end, Klepach said.

“I see no conditions for a (key) rate increase, on the contrary, there are conditions for a reduction. It is hard to tell whether the central bank will do it or not, but I think that it will reduce the rate before the end of the year,” Klepach said.

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