Government Prepares Three Forecasts For Economic Development Depending On Oil Prices

The Russian government worked out three forecasts for the country's economic development depending on oil prices on international markets, Prime Minister Mikhail Kasyanov announced. He stressed that the government expects no catastrophe even if oil prices drop significantly. If these prices are high, the government will manage to establish a financial reserve fund and it will not succeed with these plans if prices are low. The first scenario is based on high oil prices - $23 per barrel. In this case, the Russian gold and currency reserves will surge about $4 or 5 billion, the financial reserve will make up $3 or 4 billion, no foreign loans will be taken, the inflation rate will reach 13 per cent and the exchange rate will amount to 31.5 rubles per dollar. The second and more realistic scenario stipulates that oil prices will reach $18 per barrel. In this case, the volume of gold and currency reserves will remain unchanged, the financial fund for foreign debts servicing will make up about $2 or 3 billion and no foreign credits will be taken. The third, pessimistic, scenario is based on oil prices of $15 per barrel. In this case, Russia's gold and currency reserves will plummet $5 or 6 billion, foreign loans will make up about $1 billion and the inflation rate will reach from 13 to 18 per cent. The last scenario will have an impact on the Russian economic development in 2003. There still would be no financial reserve fund for paying foreign debts and Russia may have to borrow $2 billion.