MOSCOW (Pakistan Point News / Sputnik - 25th November, 2018) Risks of lower oil prices in 2019 remain amid commodity markets slump in November, but a balanced monetary policy and fiscal rule will help preserve macroeconomic stability in Russia next year, Sberbank's head of global markets research Yaroslav Lissovolik told Sputnik in an interview.
"The fall in oil prices in November indicates the risks of lower energy prices in 2019 compared to this year, but it is important that even in the conditions of possibly high volatility in oil prices, the fundamentals of macroeconomic stability will remain strong due to fiscal and monetary rules and reducing the economy's dependence on commodity markets," Lissovolik said.
At the same time, there is still some upside for oil prices to recover in the event of more decisive actions by oil exporting countries to maintain prices, as well as a decrease in the intensity of capital outflows next year, the expert noted.
In his opinion, Russia's GDP growth may even top 2 percent due to investments and the growth of non-primary exports.
"At the same time, the main factor for accelerated growth rates and exceeding rate of 2 percent per year may be the emergence of internal growth engines (primarily, improving the dynamics of investments, labor productivity, and production efficiency), as well as the growth of non-fuel exports due to Russia's entry to new markets. In the case, export growth may provide opportunities via conclusion of new trade agreements," Lissovolik said.
He recalled that in 2019, in particular, the launch of an agreement on a free trade zone between the Eurasian Economic Union (EAEU) and Singapore is expected. Negotiations are underway with a number of other fast-growing countries in Asia, he added.
According to the latest forecast of the Ministry of Economic Development, Russia's GDP growth in 2019 will be 1.3 percent with oil price at $63.4 per barrel, in 2020, the economic growth will accelerate to 2 percent with oil at $59.7 per barrel, and in 2021, GDP will grow 3.1 percent at an oil price of $57.9 per barrel.
The price of Brent crude futures, the global benchmark, has finished seventh consecutive week of losses, falling to more than a one-year low of $58.41 on Friday from a four-year high of $86.74 per barrel reached on October 3.
