«Until the end of the year, the ruble should be strengthened»: the head of the Bank «FC Opening» Zadornov on the exchange rate and economic growth

«Until the end of the year, the ruble should be strengthened»: the head of the Bank «FC Opening» Zadornov on the exchange rate and on economic rostellata link
5 September 2019, 14:10

Vladimir Agoev
The Russian currency is strengthened the US dollar and Euro until the end of 2019. The head of the Bank «FC Opening» Mikhail Zadornov expressed in an exclusive interview with RT on the sidelines of the Eastern economic forum. The top Manager also said inflation in Russia, the conditions of growth of incomes of Russians, the increase in GDP and the impact of sanctions on the country’s economy.

  • RIA Novosti

— Michael Mihajlovich, now in the expert community is actively discussing worsened the forecast of economic development the growth of the Russian economy. As expected in the office, in 2019 the country’s GDP will increase by only 1.3% in 2020 and by 1.7%. Why do you think the Ministry has reduced estimates? What growth rate you predict?

— «FC Opening» has already predicted the situation in 2020, in terms of training of internal business plans. According to our estimates, this year GDP growth will amount to about 0.9—1%. While inflation by December may slow down to 3.8%. These benchmarks are quite close to those indicators that had been indicated by the Ministry.

In our view, an important role will play a global economic slowdown. International markets, trade and global GDP in the coming year will slow down. In connection with these global crises, we expect that the growth of the Russian economy in 2020 will not reach 2% and will be about 1.5—1.7 percent.

We believe it is possible and a decline in commodity prices, which also affect the rate of growth of the Russian economy. However, inflation will remain low — close to the target of the Central Bank 4% or less. It is from this forecast, we believe planning your business for 2020.

— At a recent meeting on economic issues, President Vladimir Putin expressed concern about the incomes. According to the head of the state, they grow too slow. Due to what, in your opinion, can the situation be changed? Whether to expect higher incomes in the near future?

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— Increase of incomes of the population directly depends on economic growth. First thing you need to focus on increasing productivity. You need to make the person, taking his current workplace, could produce more goods or services and thus obtain higher income.

If we talk about the short term, but this year our budget index wages and social benefits by about 4%. This will provide additional income to the state, and they have traditionally pulled in a earnings of private sector workers.

— The attention of the Russians and experts now focused on the dynamics of the Russian currency. In July, the ruble managed to strengthen against the U.S. dollar and the Euro to its highest levels over the past year and a half. However, in recent weeks, the national currency started to weaken. What is the reason and how can change the courses of the dollar and the Euro fall and the end of the year?

Firstly, the Euro weakened against the dollar on the world market. It is now obvious that the European Central Bank will be forced in September to take measures and cash injections to further stimulate Europe’s economy.

  • Mikhail Zadornov about the change in the dollar and Euro

If we talk about the Eurozone as a whole, the GDP of the region is almost not growing. Of particular concern is the situation in the economy of Germany and Italy. Therefore, despite the fed rate cut, the dollar will be hard enough to feel, and the Euro is likely to weaken in the medium term.

From the standpoint of American and European currencies against the ruble on the situation will be influenced by changes of prices for raw materials. In principle, before the end of the year the ruble from today’s values have even strengthened. In the future everything will depend on how long you can last the decline of commodity prices and the slowdown in the global economy.

Summer in our country for the first time in two years a few weeks in a row by consumer prices. However, you mentioned that by the end of the year inflation may fall below target, the Central Bank is 4%. Will this dynamics on the policy of the Central Bank? As the controller can change the key rate?

— We expect the Central Bank will lower its key rate as early as this Friday, September 6, by 25 basis points (to 7% per annum. — RT). In addition, in the current environment, we also believe it is possible another rate reduction before the end of 2019.

— In August, the US introduced a new package of restrictions against Russia in the case Skrobala. What does it mean for the economy, the strengthening of the sanctions policy?

— New restrictions had no impact on the economy. The sanctions were formal, but some fundamentally new movements in this direction from the American administration we do not expect. Therefore, the existing sanctions will remain roughly within those parameters that we see today.

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