#3
INTERVIEW-Low oil prices could dim Russia growth hopes-Kudrin
By Anna Willard
OTTAWA, Nov 18 (Reuters) - Russia's economic growth could come in lower than the government's worst estimate of 3.8 percent next year if oil prices stay weak, Finance Minister Alexei Kudrin said on Sunday.
"If the oil price is lower than $18.50 a barrel, growth could be a little bit lower than 3.8 percent," Kudrin told Reuters in an interview.
He explained that the government has an optimistic forecast for next year's growth of 4.3 percent and a pessimistic one of 3.8 percent. The IMF, which released new figures on Saturday, sees Russian growth of 4.2 percent next year, up from a previous estimate of 3.9 percent.
Oil prices are crucial for Russia, the world's second largest oil producer, and last year's run-up in prices helped trigger the strongest economic growth since the collapse of the Soviet Union.
The Russian economy grew 8.3 percent last year, according to the IMF.
But oil prices, which ended at $17.80 a barrel on Friday, have been trading at two-year lows, driven down by slumping demand as the world economy grinds to a halt.
The price fall has been exacerbated by Russia's refusal so far to join OPEC's efforts to support substantial output cuts. Russia has made a token offer to the oil cartel to reduce output by 30,000 barrels a day which OPEC says is not enough.
Kudin said on Saturday that Russia is open to negotiations on this offer. "I didn't say it (30,000 bpd) was the final word," Kudrin said. "It is a matter of our negotiations."
FAREWELL TO THE IMF
Kudrin also said Russia's next planned repayment to IMF at the end of December will mean Russia no longer has to take part in an IMF monitoring program.
"At the end of December Russia will make an additional payment to the IMF and because of that the debt will be less than Russia's quota at the IMF and in that case Russia will no longer need to have the monitoring program," he said.
Russia, struggling to build a capitalist economy on the ruins of the Soviet system, was once the IMF's largest single borrower, with a series of largely unsuccessful IMF-sponsored lending programs.
But it has not borrowed new IMF money for some years and has been been repaying old IMF loans.
During his visit to Ottawa Kudrin met with Gerard Belanger, the deputy director of the IMF's second European Department.
Kudrin said an IMF team will visit Moscow at the end of November or beginning of December to prepare a regular report on the Russian economy and to review the monitoring agreement with the fund.
Kudrin also met with U.S. Treasury Secretary Paul O'Neill. He said that the most important economic help the United States could give Russia, is support for entry into the World Trade Organization.
He also met top finance officials from France, Britain, Germany and Saudi Arabia.
But in contrasts to the tense debt negotiations that punctuated IMF meetings in the 1990s, there was no discussion on Russia's debt to the Paris Club in these meetings.
"We are paying," he said.
Next Article