The strengthening of the ruble against the dollar will overcome the dangerous 10% mark this year. The Ministry of Economic Development has reduced the forecast for the average annual exchange rate of the national currency from 31.9 rubles to 31.1 rubles per dollar.

The Ministry of Economic Development has submitted a forecast for Russia's development in 2004-2006 to the government. This document will form the basis of the draft federal budget for 2004. According to officials, by the end of 2003 the ruble will strengthen against the dollar by 11.9%. A week ago, First Deputy Finance Minister Alexei Ulyukayev said that strengthening of the ruble against the dollar by more than 10% poses a threat to the national economy.

According to the new forecast, the average exchange rate in 2003 will be 31.1 rubles per dollar. In the scenario conditions for Russia's development in 2004-2006, which the government approved in April, the average exchange rate was forecast at 31.9 rubles per dollar.

Anton Siluanov, head of the Finance Ministry department, does not see anything tragic in the faster-than-expected strengthening of the ruble. "In the next three years, the decline in oil prices [from $25 per barrel on average in 2003] will weaken the inflow of currency and the strengthening of the ruble will no longer be so [rapid]," the official notes. In 2004, the ruble will become heavier against the dollar by 3.8 - 5.2%, in 2005 - by 2.2 - 4%, in 2006 - by 3.3 - 4.3%.

The Ministry of Economic Development has revised the entire series of exchange rate forecasts for three years. In 2004, the dollar will cost an average of 32.3 rubles (with a Urals price of $18.5 per barrel) and 31.9 rubles (with $22 per barrel). In 2005, the average annual dollar exchange rate will be 33.7 rubles (with $18.5 per barrel) and 32.7 rubles (with $22.5), and in 2006 - 34.3 rubles (with $18.5 per barrel) and 33.0 rubles (with $23).

The Ministry of Economic Development and Trade has increased its GDP forecast for this year by 0.1% to 4.6%. Most of the parameters of the forecast for 2004-2006 - inflation, GDP, raw material exports, foreign investment - have not changed. According to Deputy Minister of Economic Development Arkady Dvorkovich, their sensitivity to changes in the currency ratio is not very high. "Exports are tied to the dollar, and imports are mainly tied to the euro. The opposite vectors smooth out the overall impact," the official says. "I would not console myself with the fact that thanks to the strengthening of the euro, imports will not put pressure on domestic production," objects the head of the Development Center Andrei Klepach. According to his estimate, Europe accounts for only 40% of Russian imports, and imports from Asian countries are tied to the dollar. If the new forecast comes true, the dollar will fall to 30 rubles by the end of the year. "I am not sure that our market is ready for this," he concludes.

The forecast will be discussed by the government on May 29. According to Dvorkovich, the forecast will be updated for the last time in July.

The ruble will become 12% heavier