The bottom of the Russian economy in 2016 may require diving operations

The bottom of the Russian economy in 2016 may require diving operations


The announcement by the Ministry of economic development on the exit of national economy from the recession may be hasty, experts say, answering the question about prospects of development of Russia in 2016.

MOSCOW, 30 Dec. The situation in the Russian economy is unlikely to improve before the middle of next year: the country is still too dependent on oil prices, which can ‘bounce’ closer to the summer, consider both experts and officials. In the meantime, the oil seeks its equilibrium, the economy is “bottom fishing”, the relief is not uniform — the Ministry of economic development Declaration of withdrawal from the recession could turn out to be hasty.

Addressed to head of the Ministry Alexei speaker in 2015 was sounded not the kind of statements he was called “pink optimist”, and a diver.

“I think that diver is a very honorable profession. I… it’s flattering And just the task of the diver to see the reefs, shoals, hazards that prevent the ship to help him in moving forward,” he said at the end of the year the traditional Ulyukaev in interview to “Komsomolskaya Pravda”.

While the Ministry has committed itself to economic growth, however, the compass needle can “degauss” if oil prices in 2016 and will not be released on the forecasted 50 dollars per barrel.

Again, the decline?

November data the Ministry of economic development for GDP growth on a monthly basis with the exception of the seasonal factor showed a decline of 0.3%, for the first time in four months. Russian economic growth in monthly terms was observed from July to October 2015, which provided a basis for the authorities to say that the bottom of the crisis has passed.

Just the Russian economy turned out to be a double bottom, the irony of it experts and analysts.

Leading researcher of the Center for economic and financial research and development (CEFIR) Alexei Deviatov believes that the stabilization observed in the Russian economy in autumn, was the result of spring growth in oil prices and ruble appreciation.

“We saw in spring and partly even in summer a significant strengthening of the ruble, this was due to the rebound in oil prices when they reached $ 60 per barrel. This was supported by the Russian economy. Unfortunately, the situation has changed and oil prices plummeted, now they are at record low levels. Accordingly, the rouble weakened and the economy again went into decline,” says Devyatov.

The President of Russia Vladimir Putin signed the law on budget for 2016 December 15, document drawn up on the basis of average annual prices for Urals oil at $ 50 per barrel, inflation expectations at the level of 6.4% and a budget deficit of 3% of GDP. Official forecast Ministry for GDP growth for next year — an increase of 0.7%.

However, given current oil prices, approaching $ 35 a barrel, these figures are questioned.

So, speaking at the annual press conference, Putin was forced to admit that the price in 50 dollars for barrel is too optimistic and may need to be adjusted budget.

The Minister of economic development Ulyukayev cautious in their comments. Speaking about the revision of the GDP forecast, he admits only that there is reason to think about it, and announcing the change in the average price of oil next year, avoiding specifics. “It may be revised downwards, more precisely I will not tell you,” the laconic Minister.

Finance Minister Anton Siluanov slightly lifted the veil of “mystery oil”. “We have to be ready for any developments of the situation around oil prices… However, our estimates for next year amount to about $ 40 per barrel in the evaluation of budget revenues. So at 40 dollars a barrel there is an understanding of how we should act,” the Minister said.

Far to fifty?

Caution the speaker is shared by many economists. Objectively speaking, few people will take the risk to predict the dynamics of oil prices in the next year and to provide realistic predictions of development, they admit.

“Everything very much depends on oil prices. If there is a reversal in oil prices, increase incomes, will revive consumer demand, one can expect some reduction of inflation and growth investments,” said Devyatov from the Center for economic and financial research and development.

“But the oil doesn’t know where her balance, and finding this balance will continue,” says a senior economist for Russia of the company “Opening the Capital” Darya Isakova.

Emergency stabilization of oil prices – the main hope for the coming year. The evaluation officials and experts agree that at an average oil price of $ 50 per barrel, the situation in the Russian economy even a little, but will improve.

“The equilibrium point for economic growth — $ 50 per barrel Brent for the next year”, — says senior analyst of “Nordea Bank” Dmitry Savchenko.

Thus, according to him, oil prices in the beginning of next year will remain at relatively low levels, as fundamental factors for the trend reversal no.

“I think if the recovery will be, in the second half of next year. On average, next year we have a chance to see oil close to $ 50 per barrel, but only at the expense of growth closer to the third quarter of 2016. The first six months will be difficult,” predicts Savchenko.

Sees no signs for a reversal in the oil market and Devyatov. “As long as the signals are rather in the opposite direction, because the excess supply is very large, in addition, Iranian oil, Iraq has plans to increase the production, no significant reduction of production neither in Russia, nor in USA. From the point of view it looks like oil will be very much” — said the economist.

Dancing ruble

To monitor the situation on the oil market became imperative not only economists but also ordinary people: the movement of the price of “black gold” immediately reflected in the ruble exchange rate. Memories of the December convulsions of the ruble last year give rise to a “kitchen” rumors of three-digit numbers.

“If oil is 30, then the dollar will cost about 80 rubles, maybe a little more than 80 rubles, but in principle some kind of collapse we don’t expect. There are different predictions, someone said that 100 would be, but I think it’s too much, because that oil should be cheaper,” says Devyatov from CEFIR.

According to the forecasts of ROSBANK, in the optimistic scenario with oil price of $ 50 in the first half of the course will be on average 63-64 rubles per dollar, and if in the second half of the year the oil price will rise to 55-60 dollars, it is possible to expect strengthening of the Russian currency to 60-61 rubles per dollar.

ROSBANK also appreciated the risky option. “A negative scenario with oil price of $ 40 creates the risk that we will be for 70 rubles to be on average for 2016,” said Koshelev.

While the economic development Ministry forecasts the average annual rate of 63.3%. The Central Bank is limited to comments that the ruble will decline. Meanwhile, in recent days, 2015 daily ruble hits new record lows, weaked to the level of 73 rubles to the dollar, 80 roubles per Euro.

Inflation will ruin the demand

Oil prices also affected the real incomes of Russians in 2015 fell for the first time in 17 years, pulling down the retail trade turnover. We should expect the continuation of lower consumer demand and in the coming year, experts say.

“If the script with $ 30 for oil is implemented we will have reduced consumer demand. We can expect a reduction of 5-6% to about 10%, which we will see this year”, believes Devyatov. Official forecast Ministry for the turnover of retail for 2015 – a decline of 8.5%, in 2016 – an increase of 0.4%, real disposable incomes minus 4% and minus 0.7%, respectively.

In addition, will not support the demand and price dynamics. If in the beginning of December the Ministry of economic development expected the inflation rate to single figures in the first quarter of 2016, a fresh evaluation of the Ministry more pessimistic. Now exit to the level below 10% is expected only in the second quarter.

Blame for all the oil again. “Better, maybe not as quickly as we would like, not so fast, because, again, the oil behaves reprehensible, I would say, and the ruble, followed by the level of the consumer price index. However, still a General trend can be traced,” said the Minister of economic development Ulyukayev.

According to the analyst Devyatova, annual inflation in Russia will fluctuate around 8-9% over the next year with oil prices at us $ 40-50, if the stress scenario of 9.5-10%. Estimated ROSBANK, under favourable oil prices, inflation in the 6-7% range.

Official forecast Ministry of inflation for 2016 and 6.4%, CB — 5,5-6,5%.

The Ministry of optimism

The only official forecast that assumes GDP growth in 2016, prepared by the Ministry of economic development, recalls chief economist “PF the Capital” Evgenie Nadorshin. Even the baseline scenario of the Central Bank with an average annual oil price of $ 50 per barrel implies a decline of 0.5-1%.

“Those analysts that in the third quarter of the current year expected growth in 2016, is now reviewing the forecasts,” says the Nadorshin.

The average annual output of oil prices in 2016 in the region of 50 dollars per barrel allows you to count only the zero dynamics of the GDP, said Devyatov. If this does not happen, will be implemented gloomiest scenario.

“If the oil price will be around 30-33 dollars per barrel on average next year, then unfortunately, we will have a second year of recession, and we can expect the economy to contract by 2%”, — predicts Devyatov.

According to the analyst of ROSBANK Kosheleva, optimistic developments in the oil market with the price level of 50 dollars per barrel in the first half and 55-60 dollars in the second the Russian economy will come to a zero growth rate.

The speaker also considers that the enforcement in 2016 stress scenario with oil price at 35 dollars per barrel is unlikely. The updated forecast of economic development will be presented in January. It remains to be seen whether the economy “oxygen cylinders” to emerge from the bottom to the surface.