Fitch forecasts that the budget deficit of the Russian Federation will amount to 2% of GDP in 2016

MOSCOW, 17 Oct. Rating Agency Fitch forecasts that in 2016 the deficit of the Federal budget of the Russian Federation will amount to 2% of GDP, the economic contraction by the end of 2015 may reach 4%, said the Agency.

“Fitch expects the Federal budget deficit at 2% of GDP, based on more optimistic forecasts on oil prices of 60 dollars per barrel in 2016, compared with the official data on 50 dollars per barrel”, — stated in the message of Agency.

Regarding average oil prices, Fitch forecasts that in 2015 it will be $ 55 per barrel in 2016 — $ 60 per barrel, and in 2017 will increase to $ 70 per barrel.

Overall, Fitch expects the Russian economy in the next two years is stabilizing. “According to the revised forecasts, we expect the economy recovers, will grow 0.5 percent in 2016, growth in 2017 will amount to 1,5% “, — stated in the message of Agency. According to Fitch, “provided that the ruble will be constrained, the average inflation rate may fall to 9% in 2016 from 15.5% in 2015”.

The Agency notes that “the decline in oil prices and/or increased demand for foreign currency represents a major risk to forecasts for the reserves.” Fitch experts predict that the EU sanctions and the US against Russia will remain in force “in the medium term”. The operation of the Russian VKS the Russian Federation in Syria, according to experts of the rating Agency, “does not worsen the situation in the sense that it does not impact on the budget and economy”.