The Central Bank of Russia on economic scenarios and oil prices

Photo by Arno Milaius.

The Russian central bank sees two scenarios for the future economy. One of them is rapid adaptation to the changed conditions. The second global crisis caused by the recession, like in 2008. In this case, oil’s GDP will reach up to 2025.

Adaptation script

The economic development, called Faster Adjustment, predicts that the global economy will continue to develop according to previously established trends, and despite several palkan norms, a major recession will be avoided. Under such conditions, in 2022 46% of Russia’s GDP, but in 2023 to move into the growth zone (from minus 2% to plus 1%), and in 2024 increased by 2.53.5%.

The main pillar for the Russian economy according to the scenario would be a faster recovery of domestic demand, as well as new economic relations and the development of parallel imports, the Bank of Russia noted.

In his opinion, if the demand is met through parallel import of both new and old goods, the supply problems will be solved. In addition, according to the scenario, the transportation and logistics of the exported goods will have a positive effect.

It is predicted that in 20222025 Urals oil price will be 80, 70, 60 and 55 USD u barrel, rao respectively

Crisis scenario

The scenario of the global crisis of the Central Bank is based on the assumption that the fragmentation of the world economy, which will occur due to the geopolitical developments in recent years, the war in Ukraine and the trade war, will worsen even more. Markets will increasingly concentrate on regional blocs, and will pay less attention to exploiting relative advantages and more to localization of production. Russian exports may face even greater restrictions.

The world economy may face an economic and financial crisis, comparable in scale to 2007-2008. crisis, fears the Central Bank.

In the crisis scenario, it is assumed that the price of Russian Urals oil in the forecast period will be much lower than in the main scenario: in 2022 it amounts from 80 USD u barrel to 35 USD u barrel in 20232024, and in 2025 will rise no more than 40 USD u barrel.

The Central Bank predicts that the global crisis will make it very difficult for the Russian economy to adapt to new conditions. in 2023 the economy will shrink even more than in 2022. (5.58.5%). in 2024 change (minus 23%) and only in 2025 growth of no more than 1% will be possible.

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