Drop in oil prices to $60 per barrel 'unlikely' - Nabiullina
MOSCOW. Dec 11 (Interfax) - The Central Bank of Russia continues to believe it unlikely that oil prices will decline to $60 per barrel for an extended period, as contained in the "stress scenario," Central Bank Governor Elvira Nabiullina told journalists.
"We continue to believe it unlikely that this scenario will materialize," she said.
That scenario assumes the price of oil will fall to $60 per barrel by the beginning of 2015 and remain there over the course of three years, Nabiullina said following a meeting of the Central Bank's board.
In that case the current account balance would be about $40 billion in 2015 and rise thereafter due to modest growth in non-oil-and-gas exports and declining imports. The pace of economic growth will depend on the speed at which import substitution develops. "Slow establishment of import substitution production in 2015-2016 will lead to a mild recession. However, the decline in output and employment rates will be much smaller than in 2008-2009. Economic growth will resume in 2017, perhaps at a rate of over 5%," she said.
Inflation under the stress scenario will be a little higher than in the basic scenario, due to less of the ruble strengthening the Central Bank expects from the "overshoot effect." In the following two years, inflation will decline more quickly due to the deeper output gap, returning to the target level of 4% by the end of 2017.
"Fiscal policy will aim at stabilizing inflationary expectations, not allowing further inflationary spiraling and gradually reducing it, taking into account the outlook for economic growth among other factors. It cannot be ruled out that under this scenario we might shift sooner to an easing of our policy," she said.