Aleppo police chief comments on school attack in city’s western areaWorld October 28, 9:03
Syrian campaign experience helps Russian helicopter pilots to overpower enemy air defensesMilitary & Defense October 28, 8:19
Moscow speaks for further discussions on UN Security Council reformRussian Politics & Diplomacy October 28, 7:27
Local elections in Donbass still some way off, says Ukrainian ministerWorld October 28, 2:39
Israel’s emotions regarding UNESCO resolutions on Jerusalem are 'over top' — diplomatRussian Politics & Diplomacy October 28, 2:28
Russia speaks against politicization of probe into chemical attacks in Syria - GatilovRussian Politics & Diplomacy October 28, 2:25
Russia's envoy to UN: Conclusions on Syria’s involvement in chemical attacks unconvincingRussian Politics & Diplomacy October 28, 2:00
Russian Defense Ministry surprised by UNICEF inaction amid growing hostilities in SyriaRussian Politics & Diplomacy October 27, 23:14
Russian Defense Ministry: Video of airstrike on Syrian school doctored upRussian Politics & Diplomacy October 27, 21:22
MOSCOW, March 21. /TASS/. The Russia’s GDP will decline 1.5-2% in 2016 against oil prices of $30-40 a barrel and will show minor growth in 2017, ex-finance minister Alexey Kudrin said on Monday in an interview with TASS.
"I think oil prices will range from $35 to $40 a barrel [in 2016 - TASS]. I believe the GDP will drop from 1.5% to 2% under such prices.
The GDP may grow "next year, within 1%, from 0 to 1%", the ex-minister added.
The capital outflow in Russia in 2016 may be just as a year earlier, about $50 bln, Kudrin said. According to Central Bank’s data, the private capital outflow was $56.9 bln in 2015.
The current formal outlook of the Russian Ministry of Economic Development provides for the GDP to grow by 0.7% at the oil price of $50 a barrel.
According to Kudrin, high deficit of the Russian budget is a major factor in the weakening of the ruble, its exchange rate in 2016 could amount to 70 rubles per dollar.
"I think that a certain high budget deficit is a factor in the weakening of the ruble even if oil price is stable. I think - around 70 rubles per dollar with same oil prices," he said, adding that, according to his forecast, the price of oil in 2016 will amount to $ 35-40 per barrel.
The average dollar exchange rate since the beginning of 2016 to March 21 is around 75.48 rubles. From January 4-21, the ruble fell against the dollar by 17.8% to 85.95 rubles, then the Russian currency began to strengthen, and since then the dollar fell against the ruble by 20.7% up to 68.17 rubles.
The Russian Ministry of Economic Development told TASS earlier that exchange rate was close to the equilibrium value.
The state could oblige buyers of shares in the privatization of major assets on the low market to pay additional compensation if the stock will start to grow in the future, that is, to introduce the so-called capital gains tax, Kudrin went on to say.
"I think that, say, in a year, when a positive minimal economic growth starts and we move on from the decline in growth, this factor will change the value of our assets, for example, by 20%. Provided some global problems do not prevent it, all other things being equal. This means that they pay taxes from this growth. Thus, it turns out, we would sell it for 20% more," he said.
The so-called capital gains tax is introduced in some Western countries. The practice has not been used before in Russia.
"In it necessary to pay something to the government from this increase. And if next year there is another increase of 20% - from this also, and so on," Kudrin said, noting that the measure should be time-limited. "That is, we introduce it for some time period. We understand that, say, first 50% of increase in the cost will be taxed. And all those who are going to buy, will see these additional costs that they may incur in a year or two," Kudrin said.
According to him, in case such rule is introduced it will be necessary to develop specific approaches to reach an agreement with investors before the sale.
The government could use such compensation if it decides to hold privatization of large companies. However, according to Kudrin, now is not the best time to sell, next year will be better for privatization.
According to Kudrin, interest of traders in Russian assets, in privatization assets as well as borrowings is growing. "We are in the zone of speculative lending and sovereign rating, so we cannot speak about the great and serious interest in Russia. Great and serious is completely lost," the ex-minister said.
Kudrin called government’s plans for foreign borrowings in the amount of $3 bln in 2016, "a bold experiment of the Finance Ministry", because a specific strategy is necessary to enter the market.
"When you give the full picture, the value of your assets for privatization and the value of bonds is higher. Clarity is the strategy. It provides new market opportunities, new estimates, predictability for example. Now, without solving these issues, it is risky to announce this sales," Kudrin said.
According to him, the government could define a strategy for itself until mid-July or mid-September. "After that, announce placement," Kudrin said.
Russia’s ex-finance minister Alexei Kudrin suggests transforming the state-owned VEB Bank into the bank operating on commercial conditions.
"It can be an agent for some matters but on absolutely commercial terms," Kudrin said on Monday in an interview with TASS.
VEB should become a commercial institution and actually work as a state-owned investment bank, the ex-minister said. It should be taken away "from the area of somewhat exclusive law and legislation," Kudrin added.
VEB needs extra capitalization from the federal budget, Kudrin said. "In any case it should be additionally capitalized from the budget," he added.
VEB is currently acting as the state-owned development bank and participates in projects that cannot be funded by private investors.