The Ministry of Finance prepared for the weakening of the ruble in the next three years

The Ministry of Finance had set in the draft budget for 2017-2019 annual average dollar to 67.5 rubles., to 68.7 RUB RUB and 71.1%, respectively, reported to journalists the head of Department Anton Siluanov, reports “Interfax”. This is significantly at odds with the current dollar / ruble exchange rate (about 63 rubles) and the Ministry of economic development forecasts and previous estimates of the Ministry of Finance. Refusing to raise taxes and his conservative oil price of $40 per barrel for all three years, the Ministry of Finance remains nothing how to rely on a weaker ruble to balance the budget, experts say.

Previously, the Ministry whose forecasts should be included in the budget projections, counting on the gradual strengthening of the ruble in the years 2017-2019. As reported by “Vedomosti”, the August version of the basic forecast of Ministry of economic development assumes an average rate of 65 rubles in 2017, 64.6 per RUB. in 2018 and 64.1 RUB in 2019, and September 21, Bloomberg reported citing its sources that the Agency expects 64-65 RUB. for $1 in the next three years. The Ministry of Finance and Ministry of economic development agreed in their expectations of oil prices to $40 per barrel on average during all three years, noted the Agency.

The Ministry of Finance in July, the first budget projections focused on the average forecast values of the exchange rate at 64.8 RUB in 2017, 64,1 RUB. in 2018 and 62,7 RUB in 2019, from the July letter of Ministry of Finance with the guidelines for budgeting. Especially noticeable is the difference in the old and the new Ministry of Finance projections for 2019 — 71 now RUB against RUB 63 less in the summer.

The approach of the Ministry of Finance can be for two reasons, says the head of “Fiscal policy” the Economic expert group Alexander Suslin. The first explanation — the ruble and the truth will be so weak at $40 per barrel. “It means something that the Ministry of economic development on how the economy will develop,” suggests Suslin. However, the course of which said Siluanov, seems plausible, she admits.

Another option is the Finance Ministry need to show that the budget can be created without raising taxes with a reasonable deficit. In early September the Ministry of Finance came to the government with various proposals to increase the tax burden, but in the end, the President announced that the Agency has no proposals to increase taxes for the next three years. So, we need to use exchange rate adjustments to income: while a weaker ruble is the currency oil and gas revenues increase in ruble terms. As a result, the topic of raising taxes can be closed, specifies the Suslin.

It is estimated that the appreciation of the dollar by 1 ruble is converted about 80 billion roubles of additional incomes of the Federal budget.

Course design Siluanov did not prevent the ruble strengthened Friday: 18:40 GMT, the rouble has risen in price by 0.35% (data from Bloomberg terminal), for one dollar gave about 62,8 RUB Average rate from the beginning of 2016 is 68,3 RUB for $1.

A new course laid down by the Finance Ministry, closer to reality, before he was too high, says chief economist of “Renaissance Capital” in Russia Oleg Kuzmin. According to Bank calculations, the dollar could trade for 64-65 RUB, but with oil at $50 per barrel. And at $40, the course shall be of 69.5 rubles, says Kuzmin. In addition, it seemed strange that in the past the forecast of the ruble exchange rate gradually strengthened, with the sustained prices for oil, the expert adds. In such circumstances, in his opinion, should be based on a slight weakening of the Russian currency.

Now a barrel of Brent oil in rubles worth about 3100 RUB., Russian Urals — a little less, as traditionally sold at a discount to Brent of $2-3. If the price of Urals at $40, put in a three-year budget, and exchange rate forecasts of the Ministry of Finance, in ruble terms, the barrel should cost from 2700 to RUB 2844

The official forecast socially-economic development of Russia makes only economic development, everything else is a vision of particular members,” said the press Secretary of the Ministry Elena Lashkina. The revised forecast of Ministry of economic development will be considered later at a meeting of the budget Committee, she said.