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Russia Given the Crisis Postponement

February 20, 2008 | www.kommersant.com

Today’s concern of the analysts of biggest investment banks is to forecast to what extent the global financial crisis will hit the global economy and first of all the economy of the United States. The general opinion is that recession is inevitable for that superpower. At the same time, most of the experts don’t think that the U.S. difficulties will affect Russia even if the oil prices sink to $50/bbl.
Exactly the decline in demand of emerging economists is generally viewed as the key risk for the global economy. The 2008 pessimistic scenario of the U.N. predicts bigger mortgage arrears, tougher crediting conditions, slump on the housing market and drastic depreciation of the U.S. dollar. The recession in the United States (-1 percent) and the general slowdown in global economy (the growth of 1.6 percent in 2008 vs. 3.7 percent) are also mentioned, of course.

The basic scenario of that global authority predicts the end of decline in the U.S. construction, localization of liquidity crisis and smooth depreciation of the U.S. dollar. Under this scenario, the U.S. economy will slow down to 2 percent and the global economy will manifest the growth of 3.4 percent, which is very close to past year’s indicator.

In the IMF, they are more pessimistic. Their basic forecast is that the U.S. economy will slow down to 1.5 percent vs. 2.2 percent in 2007.

But the analysts of the U.N. and IMF don’t think that the U.S. recession will materially affect emerging economies and their views are shared by Deutsche Bank. When it comes to Russia, the optimism roots in the sizeable foreign reserves of the CBR ($474 billion at close of 2007, i.e. 30 percent of the GDP forecast for 2008), coupled with the stockpile of the Stabilization Fund ($157 billion, or 10 percent of the GDP forecast for 2008).

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