Russia?s huge current account surplus could disappear by 2009, potentially threatening a liquidity crunch in the banking system if oil prices slump, the Economy Ministry?s chief forecaster Andrei Klepach said on Friday, March 3, Mosnews.com reported.
Russia posted a record current account surplus of $87 billion last year ? over 11 percent of gross domestic product ? thanks to booming earnings from oil, gas and metals, which account for four-fifths of its exports. But growth in output of those strategic commodities has been dwindling, making the economy vulnerable to a fall in sky-high prices for oil, Andrei Klepach said in an interview with the Reuters agency.
At the same time, incomes of the Russian population are growing much faster than the economy - risking an unsustainable boom in imports.
Klepach did not see the conditions in place for a full-blown banking crisis just yet, but he said it would be crucial for the Central Bank to be ready to take appropriate steps if banking sector liquidity did dry up. ?By 2009, if [oil] prices do fall, one could arise. But ... much depends on the Central Bank, which is capable of compensating for this deficit by increasing the refinancing of banks. But nothing has been decided here yet.?
Klepach said that, if oil prices fell to around $30 per barrel, the economy ?- now growing at a rate of more than 6 percent ?- would stagnate. ?If foreign trade conditions substantially worsen, that would be a major blow to our economy,? Klepach said, noting that the world economy had suffered periodic crises at the turn of the last three decades.
