Ulyukayev: the average annual price of oil in 2016 will be above $30 per barrel

Ulyukayev: the average annual price of oil in 2016 will be above $30 per barrel


MOSCOW, January 25. The average annual price of oil in 2016 will be above 30 dollars per barrel, told journalists the Minister of economic development of Russia Alexei Ulyukayev.

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“I think that some of the rebalancing will be. The average annual oil price will be not the same as today – will be higher,” he said.

The economic development Minister also noted that he sees a potential recovery in oil prices.

“The growth in demand is the fact that in 2015 1.5 million barrels about the demand has increased. Global economy to 3 percent increase, then the demand will definitely grow,” says the speaker.

The trend of decline in GDP has stopped

The downward trend of Russia’s GDP in December of 2015, according to preliminary data, has not survived, said the speaker.

“I think the trend (GDP) will not continue – I have such an expectation. December to November has not deteriorated – it’s what I expected,” he said.

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Previously Ulyukaev reported that, according to preliminary estimates, the GDP of Russia in 2015 was 3.9%. Last forecast Ministry foresaw the downturn in the whole year at the level of 3.7-3.8%.

The Minister also told journalists that the devaluation of the ruble does not become a driver of growth for Russian economy due to the lack of investment and production capacity. “The problem is that the cost reduction leads to growth when you have either a lot of production capacity, or you can quickly invest in them. We do not have a large number of production facilities, unlike past episodes. On the other hand, we are unfortunately, investing is not enough” – said the speaker.

Currently the Ministry is revising estimates for 2016.

On key rate

The speaker does not expect the Bank of Russia will change its key interest rate at a meeting on January 29.

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“I expect nothing will change”, – he told journalists, answering an appropriate question.

Previously Ulyukaev reported that opportunities to reduce rates exist, but the final decision rests with the regulator.

The CBR since the middle of last year, took a break in the cycle of decrease of the key rate (weekly REPO rate), which currently is 11% per annum. While the regulator gives a signal to the market that in the next three meetings will reduce the rate. The next meeting of the Board of Directors on the key rate will be held on January 29.

From the key rate depend on all rates in the economy, including loans to small and medium businesses.

“You can get another full-fledged Bank”

Association of banks the Agency on insurance of contributions (the Bank “Russian capital”) and Vnesheconombank (GLOBEXBANK and Sviaz-Bank), will provide competitive state Bank, the Minister said.

“I think you can get another full-fledged Bank. If we have not obtained competition of the private banking business, the state may at least compete,” said the Minister to journalists, answering a question about the merger of the Bank Globex and Svyaz-Bank on the basis of “Russian capital” (“daughter” DIA).
The economic development Minister stressed that the Association considers reasonable “GLOBEKS” and Communication-Bank on the basis of “Russian capital”.

“I think everyone agrees that there would be some clearing of liabilities of the VEB Bank to the Bank of Russia through the transfer of assets, including “GLOBEKS” and Communication-Bank. Then – as it will be technically, as this will dispose of the Bank of Russia… With a high degree of probability it would be reasonable to do this operation (the merger of the Bank “Russian capital”), to transfer it to the DIA and under the auspices of the ACB to form from “Russian capital” and (those) of banks”, – said the Minister.
However, according to Ulyukayev, the merged Bank does not have to be a sanator companies. “The scale of this business are not,” he said.

Earlier, the head of Vnesheconombank Vladimir Dmitriev said that the Bank Globex and Svyaz-Bank, which had previously sanitized the web, will come under the control of the Agency for Deposit insurance.

The VEB expects in the first half to roll over and reduce the cost of funds previously received for the reorganization of these banks.