Outflow of capital from Russia may reach $70 billion a year

In the third quarter of the current year, the net outflow of capital from Russia made up $18.7 billion. According to statistics from the Central Bank, the index has grown to $49.3 billion since the beginning of the year. The decrease of the interest in the Russian market is reflected in the negative stock dynamics, which is very sensitive to negative influences from the outside. 

In the first quarter of the current year, the outflow of capital from Russia made up $21.4 billion. In the second quarter, the index made up $9.2 billion. Thus, the net outflow of capital from the Russian Federation during January-September of this year made up $49.3 billion.

Aleksei Ylyukaev, first deputy chairman of the Central Bank, stated in June that the outflow of capital from Russia could be evaluated at $35 billion in 2011. However, the volume of the outflow considerably exceeded the comparable index of the previous year during that time. In the beginning of October, the Central Bank revised the forecast about the outflow of capital towards a slight increase - $36 billion at year-end.

Sergei Ignatyev, the chairman of the Bank of Russia, said that the bank was not going to change anything about the forecast of the outflow of capital for 2011 in general. According to the project of basic direction of the monetary and credit policies for 2012-2014, the net outflow of capital from the Russian Federation in 2011 was planned to reach the level of $36 billion.

It is worthy of note that one of the reasons behind the outflow of capital from Russia is the fact that investors prefer to transfer their funds to less risky assets - in the United States, first and foremost. Even though the US credit rating was downgraded in August 2011, the US assets did not become less risky as opposed to the assets in other countries.

The last time, when the inflow of capital was registered in Russia, took place prior to the crisis - in 2007. The positive balance made up $81.7 billion back then. In 2009, the outflow capital made up $56.9 billion, and $35.3 billion in 2010.

"The increase of foreign assets can be connected with several factors. First off, it is the weakening of the ruble during the recent weeks. Secondly, it is the negative situation on financial markets and the reduction of oil prices. One should also bear in mind the political situation in the country. The current pre-election expectations are quite negative, which is also connected with a considerable outflow of capital. In my opinion, this situation will be preserved for a long time, and the level of the outflow of capital may near $70 billion," Anton Safonov, an expert with Investcafe said.

Russia's Ministry for Economic Development revised its forecast about the outflow of capital. Now the ministry expects a negative balance of $50 billion a year. According to previous forecasts from the ministry, the capital outflow was supposed to make up $35 billion as of year-end.

"The figure will be larger than was originally expected at the end of the year. For the time being we believe that it will be $50 billion or a little more," Deputy Minister for Economic Development Andrei Klepach told Prime news agency.

Next year, the Bank of Russia forecasts a reduction of the capital outflow from Russia to $15 billion if oil prices stay on the level of $75 per barrel. In case oil prices climb to $100 per barrel, the inflow and outflow of capital will have the zero balance. If prices rise up to $125 per barrel - the net inflow of $10 billion is expected, RIA Novosti reports.

Boris Yaremenko.

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Author`s name Dmitry Sudakov