On 31 August 2017 Minister of Economic Development of the Russian Federation Maxim Oreshkin presented an updated economic outlook for 2017-2020


August 31, 2017, the Minister of Economic Development of the Russian Federation Maxim Oreshkin presented the updated social and economic outlook until 2020.

"Our outlook now includes the OPEC deal with Russia and other producers until the end of the target period, i.e. the end of Q1[2018]. We’ve applied the traditional approach here, with the available deal being merely incorporated in the forecast. The forecast regarding the sanctions is absolutely similar and we expect them to remain in place for the entire forecast period".

"We expect the Fed to keep tightening monetary policy and believe that the would-be trajectory of the value change is underestimated by the market, which we think is a factor that could prompt a reassessment in the global markets."

"The macroeconomic forecast baseline scenario is subject to preservation of existing tax rates, while bifurcations are possible under the target scenario and they are still under discussion. So far there is no news and no sharp changes should be, in general, expected there either".


The forecast for growth in Russia’s GDP under the baseline scenario is raised to 2.1% in 2017 and up to 2.1-2.3% in 2018-2020.

"The steady growth, which we were talking about, continues, having begun in the middle of 2016. This can be already seen in terms of annual GDP growth: GDP grew by 2.5% in Q2, while the July values look weaker. The slowdown in growth rates to 1.5% is largely due to time factors and the impact of the strong ruble exchange rate in early 2017. Time factors refer to the dynamics of agriculture, which is attributable to the spring and early summer cold weather and the harvest shift. Thus, the figures for agriculture are about 3% lower in July than in the previous year. Nevertheless, this year, the harvest is expected to be not lower than the last year’s. This means that we will see much more positive dynamics of agricultural production in August and September and this factor will start acting in the other direction trend, in these months."


The forecast for the average annual price of Urals crude oil was raised from US$45.6/bbl to US$49/bbl in 2017 and from US$40.8/bbl to US$43.8/bbl in 2018. However, the price forecast for Urals crude oil under the baseline scenario remains at US$41.6/bbl in 2019 and at US$42.4/bbl in 2020.

"We expect more or less stable oil prices by the end of Q1 and their decline to the US$41 to US$42 level by mid-2018".

Ruble Exchange Rate

The yearly average exchange rate of the Ruble will be 64.7 Rubles per US Dollar in 2018 instead of previously projected 69.8 Rubles per US Dollar, while it will weaken to 66.9 instead of 71.2 Rubles per US Dollar in 2019 and to 68 Rubles per US Dollar in 2020 instead of 72.7 Rubles per US Dollar as projected in the previous forecast version.

"We estimate the current exchange rate as being very close to the fundamental one and do not expect a drastic change in the rate in the forthcoming quarters. We expect some weakening of the Ruble by 1-2 Rubles vs. the current rate before the year-end, which will be due to the continued recovery of domestic demand and further growth of imports that will slightly press the exchange rate".


Inflation rate is projected to be 3.7% in 2017 vs. 3.8% in the previous year, while 2018-2020 target remains at 4%.

"Our forecast for 2017 is now updated to 3.7% and we find the value at a bigger risk to be below 3.7% rather than higher. However, we see no risks for failure to achieve target inflation of 4%, in subsequent years."

Industrial Production

The forecast for industrial production growth in 2017 is retained at 2%, while the forecast for 2018-2020 years has been raised to 2.5% of annual growth.

Growth in Retail Trade

Expectations for retail trade growth are reduced from 1.9% to 1.2% in 2017; however, they would be more optimistic for the next year, with the increase of 2.9%.

Investments in Fixed Assets

The forecast for the growth rate of fixed asset investments has been increased to 4.1% in 2017 and to 4.7-5.7% per annum in 2018-2020.

"Increasing investments represent the major difference between the updated forecast and the previous one. It is the rise in investment activity that will contribute to GDP growth, although it has not reached the 2013 levels, while continuing to recover."

Growth of Real Income of the Population

The forecast for the increase in the real disposable incomes of the population under the baseline scenario has been raised from 1% to 1.2% for 2017 and it will grow by 2.1% (vs. previously forecasted 1.5%) in 2018 and by 1.1% (vs. previous 1.2%) in 2019.


The unemployment forecast for 2020 has been improved from 4.9% to 4.7%, with the unemployment rates for 2017-2019 remaining at the same level (i.e. 5.2%, 5% and 4.9%, respectively).

Labour productivity

The forecast for labour productivity has been raised from 1.9% to 2% in 2017, from 1.6% to 2.2% in 2018, from 1.8% to 2.4% in 2019, and from 1.9% to 2.6% in 2020.


Nominal wages will grow by 7.2% in 2017 (vs. previously forecast 5.4%), by 8% in 2018 (vs. previous 6.8%), by 5.3% in 2019 (the projected value remains unchanged), and by 5.6% in 2020 (vs. previous 5.3%). Real wages will increase by 3.1% in 2017 (vs. previous 1.3%), by 3.9% in 2018 (vs. previous 2.7%), by 1.3% in 2019 (the projected value remains unchanged), and by 1.5% in 2020 (vs. previous 1.3%).

Capital outflow

Outflow of capital from Russia is forecast to increase from US$8-10 billion to US$18 billion in 2017, while in 2018 we expect an outflow of US$7 billion."