MOSCOW: The Russian Economy Ministry has improved its outlook for the next three years, assuming oil prices will be higher than previously thought, according to a new set of forecasts obtained by Reuters. The ministry will now present the new forecast to the government and the figures, if approved, will be used as the basis for the state budget plan for the next three years. The Russian Economy Ministry did not immediately respond to a request for comment. According to the new set of official economic forecasts, the economy ministry expects the average price for a barrel of Russian Urals crude blend to fall to $44.20 by 2020, down from a current price of $51.50 <URL-E> but up from its previous forecast of $42.60 compiled in early April.
Higher prices for oil, Russia’s key export, would support the rouble. The average rouble rate versus the dollar is now seen at 64.83 by 2020, compared with 69.48 in the previous set of forecasts. The rouble was trading at 58.40 against the dollar at 1100 GMT. Higher oil prices would also help the economy grow by annual average of 2.2 percent through 2020 versus growth of 1.6 percent predicted by the economy ministry in April. Despite higher prices for Russian exports, the economy ministry predicted that Russia’s capital account surplus would shrink. The current account surplus is usually pressured by higher imports on the back of the stronger rouble. Below is the table with the economy ministry’s new forecasts: Indicator 2017 2018 2019 2020 Average* Oil price revised, $/Bbl 49.00 43.80 41.60 42.40 44.20 Oil price pvs fcast, $/Bbl 45.60 40.80 41.60 42.40 42.60 Dollar/Rouble revised 59.7 64.7 66.9 68.0 64.83 Dollar/Rouble pvs fcast 64.2 69.8 71.2 72.7 69.48 GDP revised, pct +2.1 +2.1 +2.2 +2.3 +2.2 GDP pvs fcast revised, pct +2.0 +1.5 +1.5 +1.5 +1.6 Capital account revised, pct/GDP 1.7 0.5 0.1 0.1 0.6 Capital account pvs fcast, pct/GDP 1.9 0.8 0.4 0.4 0.9.