Ruble, barrel and skis

On January 20, another Davos started. Russia was asked about the margin of financial strength.

Everyone was worried about one thing: what is the minimum level of oil prices at which the Russian authorities will be able to keep themselves from irreparable nonsense? Of course, in reality, the question answered by the head of the Civil Initiatives Committee Alexei Kudrin at the traditional breakfast of VTB Capital (like almost all members of the Russian delegation in Davos) sounded more mild. They asked about oil price forecasts and the ability of the Russian economy to survive this forecast level. Aleksey Kudrin, for example, believes that oil prices can reach not only $18 per barrel, but even $16 at the moment. But in any case, Russia's reserves will be enough to survive the expected recession for one or two years, after which Russia will return to recovery growth. And the head of the Basic Element company, Oleg Deripaska, gave a much shorter answer to a similar question: if there is still money in the 2016 budget, then there is obviously no money in the 2017 budget.

Between these two answers, in fact, lies the real Russian agenda in Davos. The medium-term decline in Russia's GDP in 2016 is a reality that is pointless to discuss. Growth in the coming year will not be, apparently, under any circumstances. On the other hand, the January collapse in oil prices is already below $28 per barrel (and Urals is already approaching $20 per barrel) - this is something like a crash test for the Russian economy.

Russia is lucky that these questions are being asked now in Davos, and not, say, at the St. Petersburg Forum in June 2015. The beginning of the year is a good time to make quick economic decisions. The financial year in the country usually starts with a budget surplus, a significant part of the budget assignments have not yet been contracted, and the carry-over balances of the 2015 budget funds have not been spent. The Reserve Fund, the last major reserve of the economy, is not spent in the first months of the year. So, there is an opportunity to think about what to do next.

There is, in fact, only one problem. The lower the cost of oil, the lower the ruble exchange rate, the more expensive imports and the higher the inflation rate in the short term (devaluation makes some contribution to the acceleration of price growth). And, accordingly, the greater the pressure on the government with the demand to immediately “stop this bacchanalia”, “change the cabinet of ministers to real business executives”, “saturate the economy with rubles” - use magic weapons against the crisis, which the government does not use either due to incompetence, or due to its wickedness. Even in Davos, there was no need to go far for this recipe: the same Oleg Deripaska complained that the government did not apply the well-known recipe for boosting the national economy - the issue of rubles.

So, behind the scenes, all the Russians in Davos, who looked more or less adequate, were asked without curtseys: “In the coming weeks, oil prices may continue to fall. To what extent is your government capable of not falling into hysterics and not engaging in self-destruction? What is the lowest oil price you can sustain during these few weeks?

Only one person could give the most reliable answer in Davos - the head of the Bank of Russia, Elvira Nabiullina. And just Elvira Nabiullina did not come to Davos in the end. From which we can conclude that we are not so far from the line beyond which everything will definitely go haywire. But - good news - we have not yet overcome it: otherwise it is not clear why the head of the Central Bank would not allow himself to go skiing for the last time.

After all, another time, the opportunity may not present itself very soon.