Bank of America raises GDP growth forecast for Russian 2010 to 3.9%
MOSCOW. Sept 28 (Interfax) - Bank of America Securities - Merrill Lynch has increased its forecast for GDP growth in Russia in 2010 from 2.4% to 3.9%, the bank said in a note.
The bank's analysts said that the new forecast for GDP growth in 2010 is above consensus, which currently comes to 2.8%.
In addition, the note said that experts expect Russian GDP growth to reach 4.2% if Urals brand oil holds at $70 a barrel.
The note said: "We consider favourable oil prices, sizeable capital inflows, higher-than-expected fiscal spending in 2010 and a possible rebound in credit growth in the second half of 2010 to be the most important factors supporting our more bullish view and out-of- consensus call on Russia."
Analysts said that the strong economic growth in Russia in 2010, in combination with high oil prices, would form the preconditions for a rally on the Russian stock market. At the same time, a speed-up in Russian economic growth would largely depend on state support, which would, in turn, bear a large budget deficit. Therefore, the bank's analysts expect rates on state and corporate bonds to increase.
The note said that analysts at Bank of America Securities - Merrill Lynch forecast's Russian GDP to decline by 7.3% in 2009.