Optimal for Russia price for oil now is roughly $40 a barrel, shown by the Bloomberg survey of experts. This price, as noted in the article, is low enough to make the inevitable institutional reforms of the economy, and at the same time high enough to prevent a collapse of the financial market.
More than half surveyed by Bloomberg experts believe that the price of a barrel of Brent to $40, on the one hand, will force the Russian authorities to reform, and with another — will allow to start without the risk of falling into a new crisis. About 30% of respondents consider that the critical level price of $30 per barrel and that the reform will start at a price above $50, I believe only about 5%.
“Price of around $30 caused a commotion, but when it is approaching $50 people who make decisions, calm down. The beginning of real reform is risky business,” — said the chief economist at the Institute of contemporary development Evgeny Gontmakher.
In the Bloomberg article highlighted that in a period of relatively low oil price policy of the Russian authorities was particularly balanced and good for the economy. So, decisions on the introduction of a flat income tax and the creation of the national welfare Fund was adopted at a time when the world price of oil fluctuated below $40 per barrel.
“Whenever oil prices were low, the government thought about reform. With the decline in oil prices to the lows of 2004, a historical perspective may prompt the authorities to move towards a more liberal policy,” said Bloomberg chief economist for Russia at Bank of America Vladimir Osakovsky.
In the course of trading Monday on the stock exchange ICE cost of a barrel of Brent crude oil ranged between $47,5 $48, slightly above the closing level of the previous trading session.
In April 2016, when the price of a barrel of Brent fluctuated slightly above $40, the Prime Minister of Russia Dmitry Medvedev, acting with the report before the state Duma, acknowledged that the state’s capacity to Finance the economy and social sphere depend substantially on the export of raw materials and the need for reform. The Prime Minister, however, stressed that a too rapid implementation of such reforms would deepen the crisis.
“Yes, the country needs deep structural reforms, the Government understands this but also understands how it will affect the social sphere. Any forced conversion would be intensified and prolonged the crisis for another few years. So I want to say: reforms at the expense of people we will not hold”, — said the head of government.
At the end of may 2016, Russian President Vladimir Putin (Brent crude oil was worth about $50) also recognised that the reserves and resources at the beginning of the two thousandth moved the economy forward, are not working as before.”
“If we don’t find new sources of growth, then GDP growth will be somewhere around zero. It is necessary to ensure the growth of the domestic economy and conduct structural reforms to improve its effectiveness. It is very important to maintain macroeconomic stability, to prevent the buildup of the budget deficit and acceleration of inflation”, — said the head of state.
Later, former Finance Minister Alexei Kudrin said in an interview that he sees Russian politicians more incentives, finally, to engage seriously with the growth of the economy, explaining, however, that “in the next two years, before the elections, no radical steps will not.”