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Russia's economic slump may hit its bottom in 6 months — deputy minister

December 02, 2014, 19:41 UTC+3 MOSCOW

Russia has all chances to enter a growing tendency in 2016

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© ITAR-TASS/Mikhail Japaridze

MOSCOW, December 2. /TASS/. Russian Ministry of Economic Development Tuesday made a domestic macroeconomic forecast, expecting that the country will slide in a recession in the first quarter of 2015, but the downward tendency will change for the better in the second half of the year.

The GDP growth will be zero at most in current fourth quarter of the year, Deputy Minister of Economic Development Aleksey Vedev told media.

In the middle of 2015 Russian economic crisis is expected to hit its bottom and after that recovery will start, so, “we have all chances to enter a growing tendency in 2016.”

Meanwhile, the ruble will fall by about 13% to the US dollar next year with an average annual forecast of 37.4 rubles in 2014 and 49 rubles in 2015. The Ministry of Economic Development expects oil prices to reach $85 up to $95 per barrel in the middle of 2015, Vedev said. The rouble may also stabilise by this time.

“There is a feeling that oil prices will be growing. We believe that we will return to a price between $85 and $95 per barrel in the medium-term prospect by the middle of 2015 or the average annual price will reach about $80 per barrel at the end of the year,” he said, noting that “A steep oil price decline also led to a weaker rouble and capital flight growth. This year we expect an outflow of $125 billion, and a capital flight forecast is increased from $50 billion to $90 billion in 2015.”

Fixed asset investments in Russia will drop by 2.8% in 2014 and by 3.5% in 2015, Vedev said. The Ministry of Economic Development planned a 2.4% drop in this indicator and a two percent growth in 2015 in the previous September forecast.

“Meanwhile, state investments remain at the previous level, companies of the infrastructure sector are reducing investments, the growth will be 2.7% against 8.3% set in the previous forecast. Private investments will drop sharply by 6.6% in 2015,” Vedev said.

Enterprises’ profit share in the GDP is at its last-20-year low, the deputy minister noted. Meanwhile, “enterprises are lacking financial resources making around half of fixed asset investment sources.”.

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