Interfax: Capital outflow from Russia might be lower than $100 bilion forecast in 2014 – minister

File Photo of Cash, Coins, Line Graph

MOSCOW. Oct 9 (Interfax) – Capital outflows from Russia in 2014 could turn out to be less than the official forecast of $100 billion, Economic Development Minister Alexei Ulyukayev believes.

“We haven’t changed the forecast for this year. It is still $100 billion. Our accumulated outflow, I believe, is currently $78 billion for eight months and it looks like it will confine itself to a smaller amount than $100 billion. But capital outflow is always a hypothesis, and we can’t precisely calculate this, we can only conjecture with some certainty. Therefore, we will not change the forecast to the end [of the year],” Ulyukayev said in an interview with radio station Ekho Moskvy.

He said there were several turning points related to capital outflows this year. The first was at the end of February, when the referendum in Crimea was announced and the “first elements of the cooling of our relations with the West, the dramatic outflow of capital from the Russian stock market and forex market began,” Ulyukayev said.

The second point, he said, was in July due to the downing of the Malaysian airliner and the first sectoral sanctions (unlike the individual sanctions imposed in March), which were “materially significant sanctions” for the economy.

Then this was compounded by the correction of oil prices, which have fallen 20% since June, and then the arrest of Sistema JSFC (MOEX: AFKS) principal shareholder Vladimir Yevtushenkov, the minister said.

“This affair probably had an impact, and even not probably but certainly had an impact on the behaviour of Russian businesses, on their decisions whether to remain in business or leave business and so on. But it’s unlikely that this already had such a strong impact on the behaviour of global forex and stock market players ,” Ulyukayev said, commenting on how he thinks the situation with Yevtushenkov affected capital outflows from Russia.