Falling oil prices in recent days is primarily due to the spread of coronavirus. He could not resist within China and beyond China. The blow fell on densely populated countries with a high concentration of modern production. Among the already affected Italy, South Korea, Japan, Iran. Further habitat difficult to predict.
against this background, investors are close to panic. “Quarantine in China has led to a stop about 80% of the total industrial sector and problems in the workplace, where the use of Chinese components, in other countries,” — said the Director of the Academy of management Finance and investment Mr. Dadashov. The IMF and other international organizations predict a decrease in the rate of global GDP growth by 0.1–0.5 percentage points this year because of the virus.
reduced need for primary resources, in particular, led to the fall in oil prices, which poses serious threats. “In case of actual evaluations of large-scale pressure viral factor on the economy of the world, not just China, oil prices can decline to levels of $45-50,” said the chief analyst “BCS Premier” Anton Pokatovich.
If this happens, the Russian Treasury will be in serious danger. The Federal budget is based on oil prices of $42-43 per barrel. Back in January of this year, “black gold” sought to $70 — and it seemed that the safety of our budget is enormous. A little over a month, and the threat to fiscal sustainability is already very real. Lightning oil has gone from $68,64 per barrel to $51,4. Left to sink for a few dollars, and hypothetical risks for the budget execution, social programs and national projects will become real.
Another danger, which is a drop of oil, is the weakening of the ruble. And despite the oft repeated recent statements of officials and experts that the Russian currency got rid of the “blackwow gold,” do not underestimate its impact on the “wood”. Dollar exchange rate on February 27 in the course of trading reached a value of 65,8 RUB and Euro — RUB 72, updating the lows from September 2019. Thus, the ruble, the whole of last year demonstrated the wonders of stability and sustainability, have not withstood the test of coronavirus and moved to the fall, which is unknown when and at what milestone will be completed.
“the dependence of the budget and the ruble from oil remains high, though reduced in recent years. The decline in prices of energy carriers essentially an effort to export, receipt of funds in the budget and the economy as a whole,” says chief analyst at TeleTrade mark Goikhman.
At the same time, according to him, the situation is far from catastrophic. The budget is balanced, based on the price of oil at $40 a barrel, drawn up with a planned surplus for the year 2020, that is, the excess of income over expenditure. “The decrease in oil prices to $50-53 may lead to reduced revenues and surplus. But the estimated costs in General, including the planned social benefits, even in this case, should not suffer, — the expert emphasizes. — Have a backup “potbelly” of the Ministry of Finance — national welfare Fund (NWF), which now stands at 7% of GDP and is precisely designed to be safe in adverse situations.”
And yet the threat remains real: the fall in oil prices can bring Russian citizens to unpleasant surprises in the form of weakening of the ruble, rising prices, the lack of indexation of wages and other payments. “In the case of a sharp increase in the risk of the spread of coronavirus and their transition in the form of a global pandemic ruble currency may demonstrate a weakening to the level of 70 rubles per dollar and 76 rubles per Euro and below in the next two quarters,” predicts Anton Pokatovich.