Fitch forecasts Russia’s international reserves, which from the beginning of the year thanks to the rally in gold and the Euro rose from 554 billion to 591,8 billion by the end of the year will amount to 570 billion dollars. This is enough to Finance external obligations for 18 months. Liquid assets of the national welfare Fund will remain above 7% of GDP in 2020 (currently at 7.7%), moreover, specifies Fitch, the government accounts have more money in comparable size – 6.6% of GDP.
Russia’s state Debt, according to Agency forecasts, will grow from 14.6 to 18.5% of GDP in 2020, but remain the lowest among countries with similar credit rating, and by 2022 Russia will be able to stabilize public debt at around 20% of GDP.
Fitch estimates the “cost” of anti-crisis measures in 2020 of 3% of GDP (more than three trillion rubles), and the budget deficit at 5.1% of GDP. In 2022, the budget deficit, according to analysts, will return to the target level of 0.5% of GDP due to the recovery of incomes and a gradual exit from stimulus.
Fitch forecasts that Russia’s GDP will shrink by 5.2% in 2020 due to the impact of the pandemic COVID-19 and the limitations of oil production under OPEC agreement+ (the last factor, according to the Agency, will cost the economy about one percentage point of GDP). Full recovery of the economy after the crisis, Fitch expects the 2022 (forecast for 2021 – GDP growth of 3.6% in 2022 and 2.5%). Overcoming the effects of the crisis, the rating agencies will maintain the monetary easing and the implementation of the economic recovery plan.
In General, estimates and forecasts Fitch, sometimes very close to the forecasts of the Bank of Russia and Ministry of economic development, it follows that the stability of the Russian economy left on pre-crisis level and that the government and the Central Bank adequately responded to the crisis.
Fitch’s Decision is another indication that the architecture in the Russian macroeconomic structure maintains stability even in turbulent external environment, said Finance Minister Anton Siluanov (his words are in the message Department). “It is significant that the revision of the 2020 credit ratings of CIS countries by Fitch Ratings in most cases they took the decision to downgrade or deterioration in the forecast on it,” – said the Minister. He recalled that the government had taken “unprecedented measures to support citizens and companies in connection with the spread of the new coronavirus infection”, including due to the significantly increased volume of government borrowing.
“overall, the economy’s decline may not be as deep, the recovery more dynamic than in other countries”, – said the Minister. The budget will gradually be brought in line with the capacity of the economy, Siluanov said: “We will return to observance of the principles of fiscal policy, both��paciaudi the stability of the economic and financial conditions in the country, designed to speed up private investment through the provision of sustainably low level of interest rates.” Starting in 2022, costs will be again limited by the budgetary rules. “This will allow us to maintain a high level of investor confidence in the ongoing macro-policy and to ensure the availability of financial resources for extra-budgetary sector”, – concluded Siluanov.
Anton Siluanov, Russia’s Finance Minister:
“the fall of the economy may not be as deep, the recovery more dynamic than in other countries.”
In August, Russia’s international reserves due to the increase in gold prices and the Euro can be made in 2008, the maximum 598,1 billion dollars, believe polled by “Prime” Agency, the experts of the Russian rating agencies. According to the latest available data, the share of Euro in international reserves at the beginning of 2020 amounted to 30.8%, gold is 19.5%. In July, the total reserves grew by 22.9 billion dollars. New record contribute a minimum sale of foreign currency in the framework of fiscal rules (the plan of the Ministry of Finance in August – intervention 64.9 bn).
According to the estimates of the managing Director of the rating service NRA Sergei Grishunin, GCR is already on 7 August could reach and even exceed the established 12 years ago the record. The value of precious metal in gold reserves could reach 152 billion dollars.