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Russia to See Capital Outflow in 2011-2012, Inflow No Sooner Than 2013 - Klepach

Image of Cash, Calculator, PenLONDON. Nov 30 (Interfax) - Capital outflow from Russia could reach $80 billion this year and around $20 billion in 2012, Deputy Economic Development Minister Andrei Klepach told Interfax.

"In 2011, capital outflow could reach approximately $80 billion and next year around $20 billion. We expect moreover that capital will start to flow in from the second half of 2012," Klepach said. But the overall trend will not be reversed this side of 2013, he said at a banking forum in London. "We are only expecting an overall positive financial account (capital inflow) in 2013-2014," he said, adding that capital inflow in those years could be $20 billion-$30 billion annually.

Although there will be capital outflow in the year as a whole, inflow is expected in the second half, Klepach said. "It looks like the tendency towards some capital outflow will persist at the start of next year, which is usual for the first quarter of a year in Russia. Even so, we expect the tendency for capital to flow in to resume in the second half of next year," Klepach said.

The capital outflow was caused by the instability in the global financial markets and the pre-election uncertainty, he said, adding that there were considerable grounds for capital to flow in.

The Econ Ministry has said capital outflow might be $50 billion in 2011 and zero in 2012. The Central Bank said in its latest forecast that $70 billion outflow was possible in 2011 and zero in 2012.

Net capital outflow was around $64 billion in January-October 2011, including $13 billion in October and $14 billion in September, the Central Bank has said.

Klepach said he thought November outflow would be $10 billion or less.

Capital outflow was $38.3 billion in 2010.

The Econ Ministry had expected inflow to commence early next year. Its most recent forecast, approved by the government in September, sees zero inflow in 2012, $15 billion net inflow in 2013 and $30 billion net inflow in 2014.

The Central Bank says in its monetary policy outline, which the government discussed in September, that the tendency for capital to flow out of Russia might be bucked in 2012, and that zero inflow was likely in 2012 if oil trades at $100 a barrel.

The CB forecasts sustained capital inflow growth of $10 billion-$15 billion per year from 2013.


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