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MOSCOW, January 12. /TASS/. The US banking giant worsened its forecast for Russia’s GDP fall in 2015 to 3% from 1%, the bank said in its survey on Monday.
Citigroup Chief Economist for Russia Ivan Chakarov has said the Russian GDP dynamics are affected by a fall in world oil prices below the projected level and the growing probability that Russia may lose its investment-grade rating.
Citi’s new forecast expects the average Brent oil price to equal $63 per barrel in 2015 compared with its previous projections of $80 per barrel.
However, two key factors will lend support to Russia’s GDP, he said.
First, the Russian economy is not heated up enough today compared with the crisis year of 2009 and this factor will limit the scope of the ongoing recession, the expert said.
Second, the Russian authorities have responded more proactively in the current situation, letting the ruble float freely to absorb external shocks, he said.
At the same time, the current situation can hardly be compared to the financial crisis of 1998 in Russia, the economist said.
In 1998, Russia was confronted with insurmountable macroeconomic pressure when the country’s budget deficit amounted to 3.7% of GDP, the current account deficit equaled 2.2% of GDP and the country’s foreign currency reserves plummeted to as low as $10 billion, he said.
Today, however, Russia has a balanced fiscal position, a current account surplus and foreign currency reserves at around $400 billion, the expert said.