Government To Reconsider GDP Forecast If Oil Prices Plummet

The GDP forecast will be reconsidered in the event oil prices plummet to $14 per barrel, Prime Minister Mikhail Kasyanov announced at a press conference today after a meeting of the Cabinet. He explained that this reconsideration would be natural as exports constitute a large component of the Russian economy. Right now there is no mechanism of transferring capital from export-oriented raw material industries to industries that are oriented toward the domestic market as there is no normally functioning banking capital in Russia. The creation of such capital is one of the aims of structural reforms in this country.

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