Macro forecast moderately conservative, but risks of non-economic factors remain that could lead to temporary deviations - Russian economic development minister

MOSCOW. Oct 12 (Interfax) - The three-year macro forecast for Russia's socio-economic development is moderately conservative; the external price environment may turn out better than expected, but risks of non-economic factors remain (including attacks on infrastructure), which could lead to temporary deviations from the forecast, Economic Development Minister Maxim Reshetnikov said at the budget committee in the State Duma.

"On the whole, the forecast remains moderately conservative. The external price environment may turn out better than our expectations. At the same time, risks of the impact of non-economic factors remain, including attacks on infrastructure and industrial facilities. They could lead to temporary deviations from the projected growth trajectory," Reshetnikov said.

Reshetnikov recalled that the Economic Development Ministry has built an acceleration of Russia's economic growth from 1.4% in 2027 to 2.4% in 2029 into the forecast.

"The external assumptions remain conservative. The Brent oil price for 2027 is set at $73 per barrel with a decline to $66 by 2029. When preparing the forecast, we took into account the high volatility of futures quotations and their dependence on the current geopolitical situation," he said.

"Compared to the spring forecast, Urals prices were raised by $1-$3 per barrel. At the same time, we take into account a wider discount to Brent. In 2027 we expect $53 per barrel, and [we expect] $51 by 2029. This is not much higher than the cut-off price of $50, which is proposed to be set from 2027," he said.

"Consumer demand remains a source of economic growth. In 2027 we expect it to increase 2.7%, and 3.1% by 2029. Consumer activity is supported by the growth of household incomes. Its sources are labor and entrepreneurial income, a gradual decline in the savings rate, and the fulfillment of all social obligations," Reshetnikov said.

"We expect a recovery in investment from 2027, but growth will be small for now - at 0.2%. We expect it to accelerate to 2.5% and 3%, respectively, in 2028-2029. The recovery depends not only on the cost of credit, but also on companies' financial condition, demand for their products and the payback of projects. Changes in financing conditions will be reflected in investment gradually. It is therefore important to simultaneously expand financing opportunities and increase the return on investment," he said.