By Darya Korsunskaya
LONDON (Reuters) – Stress scenarios from Russia’s economy ministry envisage GDP and real income growth almost grinding to a halt next year and the rouble diving from around 93 per dollar now to 107 as investments and oil prices fall, according to documents seen by Reuters.
The baseline scenario unveiled by Economy Minister Maxim Reshetnikov on Tuesday paints a rosier picture, with the ministry improving its GDP growth forecast for 2024 to 2.8%.
But even in this, the most optimistic of three scenarios, the ministry worsened its inflation outlook and expects the rouble to steadily weaken.
The economy ministry declined to comment on the stress scenario, the most pessimistic.
Reshetnikov pointed to risks of a global economic slowdown, continued sanctions pressure and restrictions on Russia’s labour market, which he said were factored into the ministry’s mid-level, “conservative” forecast.
The conservative and stress scenarios envisage lower volumes of Russian oil and gas production and exports.
The stress scenario accounts for the export price of Russian oil falling to $58.5 per barrel as early as this year, and dropping to $51.8 per barrel in 2025. Russia’s Urals crude currently trades at around $79 per barrel.
Should export prices for oil and gas and other commodities decline to the extent forecast in the stress scenario, GDP growth is seen slowing to 1.5% this year and 0.2% in 2025, compared with 2.8% and 2.3% in the baseline forecast.
In that case, fixed capital investment would rise only 0.5% this year and fall by 1.5% in 2025; real growth in disposable income – put at 5.4% last year – would drop to 1.9% this year and 0.9% next.
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Under the stress scenario, the ministry forecasts that the rouble would cross well beyond the 100 threshold by 2025, averaging 106.9 that year, and sink to 120 per dollar by 2027.
Inflation this year, already set to exceed the central bank’s 4% target at 5.1%, would be close to last year’s level at 7%. In 2025, it would exceed the bank’s target again.
Below is a table with the economy ministry’s forecasts for 2024-27 under the baseline, conservative and stress scenarios:
INDICATOR SCENARIO 2023, 2024 2025 2026 2027
fact
Oil price, Baseline 82.6 79.5 75.1 72.0 71.2
Brent, $/bbl Cons. 77.5 68.8 62.1 59.1
Stress 75.5 68.8 62.1 59.1
Export price Baseline 64.5 65.0 65.0 65.0 65.0
for Russian Cons. 62.5 58.3 54.7 52.9
oil, $/bbl Stress 58.5 51.8 47.1 45.1
Dollar/rouble Baseline 84.7 94.7 98.6 101.2 103.8
rate Cons. 96.2 102.7 107.1 110.8
Stress 97.0 106.9 115.1 120.4
Exports, Baseline 424.2 428.7 455.7 473.8 496.0
billion $ Cons. 419.7 405.7 409.5 416.4
Stress 395.3 365.7 359.9 361.9
Imports, Baseline 303.3 324.1 349.4 365.1 373.7
billion $ Cons. 315.7 327.8 337.6 345.3
Stress 293.9 290.1 294.6 300.6
Trade balance, Baseline 120.9 104.5 106.4 108.7 122.3
billion $ Cons. 104.0 77.9 71.8 71.0
Stress 101.4 75.6 65.3 61.4
Current account Baseline 50.2 27.9 26.6 25.3 34.0
balance, Cons. 27.2 23.2 19.4 22.6
billion $ Stress 26.4 19.6 11.6 8.7
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GDP growth, % Baseline 3.6 2.8 2.3 2.3 2.4
Cons. 2.2 1.6 1.6 1.7
Stress 1.5 0.2 0.7 1.1
Industrial Baseline 3.5 2.5 2.3 2.3 2.5
output growth, Cons. 2.0 0.3 2.1 1.7
% Stress 1.2 -1.7 1.7 1.1
Year-end Baseline 7.4 5.1 4.0 4.0 4.0
inflation rate, Cons. 6.0 4.4 4.0 4.0
% Stress 7.0 5.3 3.8 3.5
Capital Baseline 9.8 2.3 2.7 3.0 3.2
investment Cons. 1.2 1.7 1.9 2.2
growth, % Stress 0.5 -1.5 0.0 1.2
Retail trade Baseline 6.4 7.7 4.8 3.9 3.1
turnover, % Cons. 6.0 3.5 3.0 2.5
Stress 3.5 1.7 1.7 1.7
Real wages, % Baseline 7.8 6.5 3.6 2.8 2.5
Cons. 4.6 2.6 2.3 2.0
Stress 2.0 1.3 1.3 1.3
Real disposable Baseline 5.4 5.2 3.5 3.0 2.6
incomes, % Cons. 3.6 2.1 2.0 1.9
Stress 1.9 0.9 0.8 0.8
Unemployment, % Baseline 3.2 3.0 3.0 3.0 3.0
Cons. 3.1 3.2 3.3 3.3
Stress 3.1 3.5 3.8 3.8
