Recovery of the Russian economy may be stretched over time as distinct from 2008-2009 crisis and the Central Bank expects minor growth of GDP in the next year, Chairperson of the Central Bank Elvira Nabiullina said on Monday.

“The recovery may be stretched over time at present because [economic growth] factors should be different, unlike those before the oil price collapse. We understand this pretty well and speak about changing the behavior model of the economy and its development model. Economic recovery signs surfaced by now and the Bank of Russia expects minor growth of GDP,” Nabiullina said.

The bank anticipates remaining sanctions, slow growth of global economy, she added.

External and domestic environment for the Russian economy will be challenging in three coming years, she noted.

“We expect external environment will regrettably remain challenging for our economy and internal conditions will be tough. We do not expect any significant transformational change of the economy and buildup of its potential so far,” Nabiullina said, adding that the bank may continue lowering key rate next year if base case scenario is implemented.

Potential economic growth rates

According to Nabiullina, potential economic growth rates are estimated below 2% unless structural changes are implemented.

“We estimate potential growth rates are below 2% if no structural changes are implemented. Therefore the most important outcome of economic adaptation to new conditions is that the economy starts testing the new development model. The task of the Central Bank here is to support this process and provide stable financial environment for buildup of internal sources of investments,” Nabiullina said.

Export growth rates will remain low, she added.

“Export growth rates will remain low, particularly because we project conservative oil prices. The economic structure will still remain with a huge share of oil and gas export by inertia and import will recover slightly along with reviving demand. We see investment import is recovering currently and hope this will influence on production growth,” Nabiullina said.

Oil price

The Russian Central Bank expects oil price at $40 per barrel for the next 3 years, Nabiullina said.

“We are considering several scenarios of economic development, our base scenario includes $40 per barrel in the next three years,” the bank’s chief explained.

So far, the price of oil is at around $40 per barrel. The price of futures contract for Brent crude oil with January delivery fell by 1.8% to $44.96 per barrel on London’s ICE. The last time price of oil of this class was below the level of $45 per barrel was on November 9.

Capital outflow

Capital outflow from Russia will be less than $20 bln in 2016, Nabiullina said.

“The outflow of capital from Russia will remain at a low level throughout the forecast period (2017-2019) – around $25 bln, and this year we expect less than $20 bln,” she said.