Russia's Finance Ministry says oil prices may hover around $40-60 per barrel in 2017-2019

Baku, February 6, AZERTAC

Oil prices will be hovering around $40-60 per barrel in 2017-2019, according to the Finance Ministry’s Main guidelines for 2017-2019 debt policy released on Monday, TASS reports.

"The oil price dynamics will still be one of the key risks for the Russian economy over the projected period (of 2017-2019 - TASS). Given the global demand and supply trends oil prices are expected to hover around $40-60 per barrel in the mentioned period," the report said.

Russia’s net borrowing amounted to 606.6 billion rubles ($10.3 bln) in 2016, according to the Guidelines for 2017-2019 debt policy.

According to the document, of this amount 500 billion rubles ($8.5 bln) were borrowed on domestic market and 106.6 billion rubles ($1.8 bln) - on foreign market.

Russia’s Finance Ministry also says planned domestic borrowings for 2017-2019 are marginal.

According to the ministry's predictions, the net domestic borrowing will reach 1.1% of GDP in 2019 setting a record in the whole history of modern Russia:

"The volume of net external borrowings denominated in securities will take negative values: minus 21.2 bln rubles ($361 mln) in 2017, minus 60.1 ($1 bln) and minus 13.2 bln rubles ($225 mln) in 2018 and 2019, respectively. As for the <...> gross domestic borrowings, they, on the contrary, will increase from 1.2% of GDP in 2016 to 1.7% in 2019. This year (2019) net domestic borrowing will reach 1.1% of GDP [compared to 0.6% of GDP in 2016]. These values will be maximum for the whole history of modern Russia," the document says.

The Finance Ministry’s experts mark a trend towards accumulation of sufficient budget risks, related to possible worsening of terms of borrowings for Russia as a sovereign borrower and the growth of debt burden.

"Under the most negative scenario it may concern impossibility to attract loans in required volumes and on acceptable conditions," the document said.

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