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Ex-Finance Minister Kudrin expects average oil price to surpass $50 per barrel in 2017

June 01, 10:45 UTC+3

With a cut-off oil price of $55 per barrel, budget deficit will reach zero, according to ex-Finance Minister Alexey Kudrin

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© Egor Aleev/TASS

ST. PETERSBURG, June 1. /TASS/. Average oil price in 2017 will surpass $50 per barrel, Head of Russia’s Center for Strategic Research (CSR) and ex-Finance Minister Alexey Kudrin said at the St. Petersburg International Economic Forum 2017.

"Average oil price this year will be higher than $50 per barrel," he said.

With a cut-off oil price of $55 per barrel, budget deficit will reach zero, he went on.

"At $45 per barrel, 1% or 1.5% deficit is normal, then at a price of $55 dollars per barrel we allocate a share to the budget, thus the deficit will reach 0% or 0.5% - almost zero. That is why I think that we are in a zone of reasonable economic values ," Kudrin said.

Inflation

"I think it’s more realistic to target 2.5% inflation after 2024," he said, adding that the Central Bank "is rational enough to stick to around 4%" as a number of restrictive factors do not allow to downgrade the inflation target, including oil dependence, tariffs and price formation, low efficiency.

ong-term decline of inflation creates a fundamentally new factor. The Central Bank will have no choice but to decrease the key rate in the next few years. Every six months we will see the key rate declining by 0.5% if we achieve these target inflation of 4%," Kudrin said.

According to him, if inflation remains at 4% for at least 3 years, the price of all the country’s resources would reduce.

Russia’s Central Bank projects annual inflation within the range of 4-4.2% in May.

Economic Development Ministry said annual inflation had reached 4% as of May 15.

According to the data provided by the state statistics service Rosstat, inflation amounted to 0.3% in April in annual terms, though in monthly terms the consumer price growth slowed down to 4.1%.

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