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Russia’s 2014 budget to gain from ruble fall but economy falters — expert

December 17, 2014, 14:49 UTC+3 MOSCOW
Russian economy will slide into recession already next year, says Vnesheconombank deputy CEO Andrey Klepach
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Currency exchange rates outside a shopping centre in Moscow, 16 December 2014

Currency exchange rates outside a shopping centre in Moscow, 16 December 2014

© EPA/MAXIM SHIPENKOV

MOSCOW, December 17. /TASS/. Russia’s budget will gain 50-100 billion rubles ($730 million - $1.5 billion) from the ruble devaluation and a plunge in world oil prices but the domestic economy is faltering, Vnesheconombank deputy CEO Andrey Klepach said on Wednesday.

Klepach, who previously worked as a deputy economy minister in charge of macro-economic forecasting, said the current oil price level is about $40 (per barrel) lower than the price stipulated in the budget, and the dollar is overvalued.

Some expert calculations show that with the oil price fall by $3 per barrel, the Russian currency has to be devalued by 1 ruble.

“If we roughly calculate this balance, the budget will gain about 700-900 billion rubles ($10-13 billion). But we forget that our economy is falling and import is falling. That is why, a real gain is little. Approximately 50-100 billion rubles,” Klepach said.

In these conditions, the Russian economy will slide into recession already next year.

At the same time, there is no need in the current situation to urgently revise the budget, he said.

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