Today’s Vedomosti.ru quotes opinions of several economic experts on the prospects for the Russian economy in 2013. Most of the experts agree that the GDP growth will continue to slow down, accompanied by a relatively high inflation and a continued net capital outflow. According to their expectations, the current account surplus will decrease by another 30 percent (on top of the 20 percent decrease in 2012), the ruble will weaken against major currencies, and consumer spending, although reduced, will remain the principal driving force of the economy. Such developments represent a continuation of the existing trends in absence of a new internal or external impetus.
Economists are also concerned about the risk of recession in Germany, as its banks are actively financing the periphery of the EU, thus steering funds away from the domestic economy. The ongoing possibility of Greece stepping out of the Euro zone, postponement of the solution to the U.S. fiscal cliff and uncertainties regarding growth rates in China are among other factors that could negatively affect the Russian economy. In addition, some analysts expect that the oil supply will exceed the demand; while most of the 14 interviewed analysts expect the oil price to remain within the range of USD 100-110 per barrel, two of them believe that the price will stabilize between USD 93-95 per barrel, and two are willing to bet above the majority estimate, but only by a fraction, quoting USD 110.5 per barrel as the expected average price in 2013.

Experts are not sure what should be done to boost the Russian economy, but currently do not see any signs of an impending change in the current trend. Even if the Government decides to provide new stimulus from the budget or national reserve funds and/or implement a more aggressive institutional reform, these measures would yield results only in the longer run.

Most of the quoted experts expect the Russian GDP to grow by between 3-3.5 percent, while four of them believe that the growth will be below 3 percent. The most pessimistic forecast is equal to the actual annualized GDP growth in the IV quarter of 2012 – a mere 2 percent (interestingly enough, the most pessimistic estimate came from the expert of the Russian investment bank VTB Capital). Lower growth rates could provoke the Government to mandate government-owned companies to increase their investments. However, some analysts are of the opinion that any strengthening of the government sector could actually slow the economy even further. Other analysts are warning of possible “overheating” should the Government attempt to squeeze out more from the economy than it would naturally yield. Analysts see the potential for the increased role of the domestic financial sector, which could become more engaged in financing the local economy should the Central Bank prove that it can control the inflation.

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