Econ Ministry restores original GDP forecasts under baseline scenario – newspaper
MOSCOW. Oct 18 (Interfax) – The Russian Economic Development Ministry has restored its original baseline GDP growth forecasts: 0.6% in 2017, 1.7% in 2018 and 2.1% in 2019, the newspaper Vedomosti reported, citing the final version of the forecast forwarded to the Finance Ministry, which will subsequently be submitted to the government together with the budget.
The baseline scenario, which is used as the basis for drawing up the budget, assumes Urals crude oil priced at $40 per barrel in 2017-2019.
The aforementioned figures were the Econ Ministry’s original GDP growth forecasts under the baseline scenario. But they were revised downward after the government called for the 2017 inflation forecast to be reduced to 4% from 4.9%: to GDP growth of 0.2% in 2017, 0.9% in 2018 and 1.2% in 2019. The ministry said the revisions accounted for budget consolidation and tighter monetary policy in order to achieve the inflation target of 4% in 2017.
The original growth figures have been restored at the direction of the government, which examined the forecast and the draft budget at a meeting on October 13.
The meeting left other scenario forecasts virtually unchanged.
Inflation is forecast at 4% each year under the baseline scenario. The ruble exchange rate will be 67.5 rubles/$1 in 2017, 68.7 rubles/$1 in 2018 and 71.1 rubles/$1 in 2019.
Industrial output will increase 1.1%, 1.7% and 2.1% in 2017-2019 respectively and capital investment will rise 0.5%, 0.9% and 1.6% respectively.
Retail is slated to increase 0.5% in 2017, 1.1% in 2018 and 1.8% in 2019.
The Economic Development Ministry notes that it believes the baseline+ scenario is more realistic. It assumes oil priced at $48 per barrel in 2017, $52 in 2018 and $55 in 2019.
The baseline+ scenario forecasts GDP growth at 1.1%, 1.8% and 2.4% respectively in 2017-2019. Inflation will amount to 4.5%, 4.3% and 4.1% respectively and the ruble/$1 exchange rate will be 63.3 rubles, 62.1 rubles and 61.3 rubles.
Industrial output under the baseline+ scenario will rise 1.6% in 2017, 2.3% in 2018 and 2.7% in 2019, capital investment will grow 1.5%, 2.8% and 4.4% respectively and retail trade will increase 2.0%, 2.7% and 3.5%.