Russia Needs $60/Barrel Oil Price for Stable Recovery in 2011, Kudrin Says
Russia needs oil to average more than $60 a barrel next year to ensure a sustained recovery from its record slump in 2009, Finance Minister Alexei Kudrin said. That’s 21 percent less than this year’s average price.
Russia, the world’s biggest energy exporter, and other emerging markets face a better outlook and less uncertainty than developed economies, Kudrin told reporters late yesterday in Washington, where he’s taking part in the International Monetary Fund’s annual meeting.
“Developing markets are generally seen in a more positive, optimistic light by everyone,” Kudrin said.
The world economy will expand 4.2 percent next year, the IMF said in an Oct. 6 report, compared with a July forecast of 4.3 percent. Developing nations will grow 6.4 percent next year, unchanged from the previous estimate, while advanced economies will expand 2.2 percent, down from an earlier 2.4 percent forecast, according to the IMF.
Urals blend, Russia’s benchmark for oil exports, has risen 7.3 percent to $82.31 a barrel this year. It averaged $76.08 during the period and dropped to a low of $67.31 on May 25, according to data compiled by Bloomberg.
Russia’s gross domestic product grows by about half a percentage point for every $10 increase in the price of oil, according to Deputy Economy Minister Andrei Klepach.
The economy will expand more than 4 percent in 2011, Prime Minister Vladimir Putin said Sept. 8. The Economy Ministry forecasts growth of 3.9 percent to 4.5 percent in the next three years. Annual growth may slow to 2 percent in 2011-2013 if prices for oil and gas fall, Klepach said this week.
The government estimates GDP will increase 4 percent in 2010 after last year’s 7.9 percent contraction, the biggest since the Soviet Union’s collapse in 1991.
To contact the reporter on this story: Paul Abelsky in Moscow at pabelsky@bloomberg.net.
To contact the editor responsible for this story: Willy Morris at wmorris@bloomberg.net.
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