The Russian economy has the potential to show some growth, and keep its budget deficit at 4.5 percent of gross domestic product even if Russia faces a new crisis, Economic Development Minister Elvira Nabiullina said on Thursday.
Under the draft budget for the next three years, the budget deficit will range from 0.7 percent to 1.5 percent of GDP but the ministry has forecast how it may change if a new crisis hits Russia, the minister said.
"Even if unfavorable world trends persist, our economy will resume growth at 2.5-3.7 percent of GDP in 2012-2014 even under these stress conditions, drawing on internal sources of growth," Nabiullina said.
The ministry’s stress tests show that even with a second crisis , which is unlikely to be as severe as in 2008-2009, and a fall in world oil prices to $80 per barrel, annual GDP growth will slow to 2 percent, while a decline in oil prices to $60 per barrel will trigger GDP contraction by 1.5-2 percent, she said.
"Even if annual world oil prices fall to $60 per barrel, Russia will be able to resume stimulating fiscal programs and keep the budget deficit at 4.5 percent of GDP," she said.
