World Bank: the situation on the oil market – a chance for Russia to increase export of non-oil goods

World Bank: the situation on the oil market – a chance for Russia to increase export of non-oil goods

MOSCOW, January 14. The decline in oil demand in the world market is an opportunity for Russia to increase exports of manufactured goods. This opinion was expressed by the permanent representative of the world Bank in the Russian Federation Andras Horvai in the framework of the Gaidar forum 2016, organized by the Ranepa and the Gaidar Institute.

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“We see that many countries could seriously change the energy intensity of its economy. In particular, it has become less energy intensive. Countries-exporters of oil of greater profits for themselves can sell and other commodities, non-commodity goods. Importing countries are beginning to demand not only oil but also some other goods… Russia will be able to sell more of its non-oil exports in its traditional markets. Moreover, these goods will be more competitive due to the weakening of the ruble”, – he told in interview to RBC TV channel.

Horvai stressed that the global economy is difficult to adapt to constantly changing oil prices. “Not by itself low price levels may present a problem, namely their instability”, – concluded the representative of the world Bank.

According to him, the effect that have on the economy of Russia sanctions U.S. and EU, less effect from variations in oil prices, problems in the international capital market and banking sector

The impact of the exchange rate on investment activity

The weakening of the ruble exchange rate may boost exports and revive investment activity in Russia, he said.

As a rule, since the weakening or devaluation of the national currency prior to the export growth there is a certain lag, noted Horvai.

During this period, “the export-oriented sectors in Russia has a great chance to improve their performance and increase productivity. Including due to the fact that changes of relative prices due to the cheapening of the ruble,” he continued.

“If we can use this, if must and suitable environment, and then Russian and foreign investors will come to the market,” – said the representative of the world Bank.

The world Bank predicts a decrease of real GDP in Russia in the coming year by 0.7%. Over the past year, according to his estimates, the decline reached 3.8%. In 2017, in the opinion of its analysts, the recession should be replaced by a rise of 1.3%.