The Ministry of Economic Development has revised the forecast for the ruble exchange rate in 2018

During a speech in the State Duma, the head of the Ministry of Economic Development, Maxim Oreshkin, announced new forecasts for the ruble against the dollar, oil prices, GDP and the growth of real incomes of the population, lowering the estimate of industrial production growth and allowing lower GDP growth rates.

Details

• The forecast for the average annual exchange rate of the ruble against the dollar has improved from the 64.7 rubles per dollar assumed in the previous baseline scenario to "slightly above 60 rubles." Before the introduction of new US sanctions in March, the Ministry of Economy estimated it at 58.6 rubles per dollar.
• The new forecast for Urals oil prices is $65-70 per barrel instead of the oil price of $43.8 per barrel taken as the basis for the formation of the budget. After the December OPEC+ agreement to limit global oil production, the Ministry of Economy raised the forecast to $61.4 per barrel in the spring.
• The Ministry of Economic Development also revised the lower bar for the growth of industrial production of GDP. If earlier the ministry expected GDP growth of at least 2.1%, now it is 1.6-2.1%. The top bar remains unchanged.
• Forecasts on the level of inflation have also changed: in April, the ministry expected inflation at the level of 2.8%, now it is 2.7-3.2%.
• Oreshkin also noted that instead of the previously assumed 2.3-3.8%, the growth in real incomes of the population may be 3.4-3.9%, and the poverty rate may decrease from 12.3% to 11.1%.
• The Ministry of Economics also believes that, on an annual basis, the increase in industrial production in 2018 will decrease from 2.5% to 1.7%.

Context

Explaining the reasons for the revision of the forecast, Oreshkin said that since its publication, "we have faced new sanctions, with volatility in the financial market." In early April, the US Treasury imposed sanctions against 24 major Russian businessmen and officials, as well as 14 companies, including those associated with Russian billionaires Oleg Deripaska and Viktor Vekselberg.

Liana Faizova