Fitch has lowered its forecast for the Russian economy


In global forecast, published on 7 March, Fitch analysts predicted that Russia’s GDP in 2016 will be reduced by 1.5%. In December, rating Agency, on the contrary, predicted next year GDP growth by 0.5%.

This forecast, Fitch analysts explain the decline in oil prices that resulted in reduced corporate income and provokes a tightening of the fiscal policy. It is indicated that high interest rates and falling real incomes are putting pressure on consumption.

Fitch also assumes average Brent oil price in 2016 will be $35 per barrel, and in 2017 — $45. This is below the December forecast of the rating Agency. Analysts attributed the change in its position by the fact that oil production in January in the OPEC countries exceeded their expectations.

In addition, the pressure on the global economy will have a slowdown in China’s economic growth (6.2 per cent instead of 6.3 per cent in the previous forecast).

On March 5, Moody’s investors service put the sovereign credit rating of Russia, located at the level of Ba1, on review for possible reduction.

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“During the review Moody’s will evaluate the impact of a further fall in oil prices, which, according to the forecasts of Moody’s, will remain low for several years, the state of the Russian economy and balance of payments, including a deficit financing of state obligations”, — stated in the message of Agency.

At the end of February 2015, Moody’s downgraded the sovereign credit rating of Russia to Ba1 with a negative Outlook, this level is considered “junk”. A month before their rating to below investment level (BB+) has been downgraded by the Agency Standard & Poor’s. Fitch from mid-January 2015 keeps Russia’s rating at BBB-, or on the verge of “junk”.