The Russian Economy Ministry recently announced that it has decided to decrease its growth outlook for the Russian domestic economy. Citing diminishing oil prices, weakened exports, and a global economic slowdown, Deputy Minister of Economic Development Andre Klepach now says that GDP growth is expected to come in near 4.1%, down from the 4.2% expected earlier this year.
Economists also view the value of the Russian ruble (RUS) to be in decline, with some estimates predicting a 25% loss of value against the US dollar (USD) over the next three years. The Economy Ministry highlighted that its growth forecast for the RUS was also cut, expecting it to reach roughly 28.6 against the greenback as opposed to the 28.4 previously anticipated. A deficit in Russia’s current account is also expected to arise in 2013, standing contrary to the surplus of 2011 and predicted surplus of 2012.
Klepach did offer some conciliatory tones in stating that his ministry does not believe a double-dip global recession is impending, or even likely. But the general slow-down in growth among emerging economies like China and India, as well as those of Eastern Europe, does gouge many previous forecasts. Making Russia’s economic outlook reflect this reality was only logical and should not alter investor portfolios in any major way.
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