Russian Ministry of Economy adjusts its forecast for GDP growth in 2013

Business daily RBK reports that the Russian Ministry of Economy reduced its forecast for 2013 GDP growth from 3.7 percent to 3.6 percent. According to Deputy Minister Andrey Klepach, the Ministry forecasts that the average RUR/USD exchange rate in 2013 will be slightly lower than previously expected – 31.1 instead of 31.3 rubles per dollar. Unfortunately, the forecast that was revised upwards is that of capital outflow: the Ministry expects that the aggregate capital outflow in 2012 will reach USD 73-75 billion instead of USD 60-65 billion, as previously expected. However, Deputy Minister stated that the outflow in 2013 might drop down to between zero and USD 10 billion, the latter being the forecast by the Russian Central Bank. Deputy Minister added that scheduled privatization deals could significantly influence capital outflow forecasts for 2013, but that the outflow will continue at a current rate in December 2012 and in the beginning of 2013.

The Ministry of Economy expects that the average annual price of Urals oil will be around USD 110 per barrel, slightly revised from the previous forecast of USD 109 per barrel. Taking all of the aforementioned indicators into consideration, the Ministry of Economy expects that the Russian GDP will grow by close to 4 percent in 2013. Earlier this week, the Russian Prime Minister Dmitry Medvedev stated that the industrial production in the first nine months of 2012 grew by 2.8 percent compared to the same period in 2011, while fixed capital formation grew by 9 percent.

The forecasts are in line with the data published by the Russian Statistical Bureau, indicating that the Russian GDP for the first nine months of 2012 increased by 3.9 percent compared to the same period in 2011, reaching 44.11 trillion rubles (USD 1.43 trillion) in current prices. Organization for Economic Cooperation and Development (OECD) published a somewhat more pessimistic forecast for the Russian economy, expecting a GDP growth of 3.4 percent in 2012 (revised from its forecast of 4.5 percent published in May) and 3.8 percent in 2013 (revised from the previous forecast of 4.1 percent). The OECD report quotes the global economic slowdown, EU debt crisis and internal political uncertainty as the main reasons for slower GDP growth in Russia in 2013. While experts agree that the first two factors represent the principal risks for the Russian economy, as they could lead to lower oil prices, OECD expects that the Russian GDP growth in 2014 will exceed 4 percent.

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