Experts at the US financial corporation Morgan Stanley expect the Gross Domestic Product in Russia to contract by 1.3% in 2016. Only in 2017, there is hope of a 1.7% rise of the Russian economy.
However, taking into consideration a continuous fall in crude prices and mounting tension in Ukraine, economists came to a conclusion that the Russian economy would decrease by 3% in 2016. Only if all these factors manage to surprise analysts with positive changes, the economy will get a slim chance to grow next year.
The forecast was revised on the basis that Brent is priced at $55 a barrel on average. Besides, analysts expect Russia’s unemployment rate to rise by 6.5% in 2016 with an inflation rate at the level of 15.5% in 2015 and 8.6% in 2016. The rise in these indicators will be followed by a sharp decline in consumer spending.
Experts’ forecasts show the US dollar will hit the level of 70 rubles in late 2015 and the level of 73 rubles by the end of 2016.
The Russian authorities are expected to let the ruble continue to weaken, following crude prices, in order to maintain the current account balance.
In addition, the Western sanctions against Russia prohibit the import of oil and gas production technologies that have an adverse impact on the domestic investment and production. A drop in the proportion of working-age population and the rigid labor market also weigh on the Russian GDP growth rate.
