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Russia May See Capital Inflow After March Vote, Klepach Says

Russia will probably have net capital inflows resume after the March presidential election, Deputy Economy Minister Andrei Klepach said.

Russia may show a net inflow in the second half, although the result for the full year isn’t yet clear, Klepach told reporters today in Moscow. While the ruble may continue to appreciate in the “short term,” there are “no reasons for a sharp change in the ruble’s trend,” he said.

The presidential election, contested by Prime Minister Vladimir Putin, will be held on March 4. The country’s net outflow of capital more than doubled last year to $84.2 billion, reaching the second-highest level since central bank records began in 1994, Bank Rossii estimates.

Inflation this month probably won’t exceed the rate in January, when it reached about 0.5 percent, according to Klepach. The government will run a budget deficit of about 1 percent of gross domestic product, less than forecast, he estimates.

Industrial production is slowing, with stagnation “very probable” for manufacturers over the coming months, Klepach said.

To contact the reporter on this story: Scott Rose in Moscow at rrose10@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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