International rating Agency Fitch downgraded its forecast for the Russian economy in 2016. Now instead of growing 0.5 per cent, analysts expect reduction of GDP of 1.5 per cent. This is stated in the press release of the Agency, published on Monday, March 7.
Worsening of the forecast compared to the December 2015 Fitch justified the revision of the forecast of dynamics of the oil prices in 2016. In a new forecast, the analysts proceed from the average cost of Brent in the current year $ 35 per barrel and $ 45 in 2017, whereas previously they expected price growth to $ 45 in 2016, and to 55 in 2017.
The authors of the press release, the decline in oil prices will reduce corporate revenues of Russian companies and will force the government to reconsider its economic policy, while high interest rates and falling real wages will decrease consumption.
On March 5, another rating Agency — Moody’s put Russia’s credit rating Ba1 on review for possible downgrade. Analysts expect raw material prices will remain low in the coming years, which will force the Russian government to look for options for covering the budget deficit.
The Minister of Finance of the Russian Federation Anton Siluanov, commenting on the decision, Moody’s said that it reflects the need for “adaptation of the budget system to the new realities in the commodities market”. According to the head of the Ministry of Finance, the government has prepared measures to promptly respond to the evolving economic situation and considering the issue of the medium-term budget balance.
3 March 2016, the Bank of Russia in its report called vague prospects of the Russian economic recovery. The expectations are that in the first quarter of 2016, Russia’s GDP will drop 0.3 percent, the second will be zero growth in the third — an increase of 0.2 to 0.3 percent (compared to the same quarters of 2015).