Russia Revises Forecasts for Main Economic Parameters Downward

Russian Economic Development Ministry's adjusted outlook on economic development was presented, according to which significant changes were introduced.

MOSCOW, December 2 (Sputnik) — Russia's Economic Development Ministry has revised its forecasts for several important economic parameters, including GDP growth, inflation and the ruble's exchange rate for 2014 and 2015, Deputy Economic Development Minister Alexei Vedev told journalists Tuesday.

The deputy minister presented the Economic Development Ministry's adjusted outlook on economic development, according to which significant changes were introduced.

Gross Domestic Product

"We have increased estimation of GDP growth in 2014 to 0.6 percent versus 0.5 percent in the approved forecast and substantially revised the dynamics of GDP in 2015. The current version is based on the forecast of a decline in GDP by 0.8 percent in 2015 against growth of 1.2 percent in the previous version of the forecast," Vedev said, introducing the updated socio-economic development forecast for 2015-2017.

The deputy minister added that a recession is expected in the first half 2015. However, another official at the Economic Development Ministry said that there will most likely be no recession in 2014.

Inflation

Vedev told journalists that according to the adjusted outlook, the outlook on inflation worsened: the forecast for 2014 is now at 9 percent against an earlier forecast of 7.5 percent, and 7.5 percent against 5.5 percent previously forecast for 2015.

The Economic Development Ministry also expects a slowdown in inflation in December 2014 due to the stabilization of the ruble's exchange rate at the current level and a decrease in consumer activity, which will allow inflation to meet its forecast of 9 percent for the year.

Ruble Rate

As for the Russian currency, its average annual exchange rate for 2015 has been revised upward to 49 rubles from 37.7 rubles per dollar.

"The average rate for the next year is 49 rubles per dollar. And in 2014, the average [exchange rate] was increased to 37.4 [rubles per dollar]. In real terms, the ruble weakened in 2014 by 6.8 [percent], in 2015, by 13.5 [percent]," the deputy minister said.

Sanctions

As for the sanctions imposed on Russia by the Western, the Economic Development Ministry now expects the sanctions to last until the end of 2015, whereas previously the ministry expected them to be lifted in the middle of 2015.

"The main prerequisites of our September forecast were the price of oil, the weakening of geopolitical tensions and the lifting of sanctions by mid-2015. Now we have strengthened our assumptions and assume that the sanctions will be preserved for the whole 2015," Vedev told journalists.

The West has imposed several rounds of sanctions against Russia over its alleged involvement in the Ukrainian crisis, claims repeatedly denied by Moscow. The sanctions target Russia's banking, defense and energy sectors, as well as certain individuals.