Russian authorities appear to believe that the oil price surge triggered by the war in Iran will provide a long-term buffer. The Ministry of Finance has retracted plans to cut spending, while the CMASF (Center for Macroeconomic Analysis and Short-term Forecasting), a think tank close to the Kremlin, has revised its outlook based on significantly more expensive oil.
CMASF Forecast Highlights:
- Urals Price: Forecast raised from $55.6 to $81.6 per barrel.
- Exchange Rate: Expected ruble appreciation to 70–73 RUB/$ by December 2026.
- GDP Growth: Remains stagnant, with a minimal increase from 0.8% to 0.9–1.3%.
- Inflation: Projected to rise to 5.8–6.1%, exceeding previous estimates despite high interest rates.
Analytical Summary:
The warning of “Dutch Disease” from pro-Kremlin experts is a sign that the Russian economy has lost its internal growth drivers.
The “Dutch Disease” Trap: The CMASF warns that the benefits of favorable market conditions will remain “locked within a narrow circle of rent-seekers” (state corporations and the military-industrial complex) and will barely trickle down to the broader economy.
Currency Paradox: A stronger ruble (70 RUB/$) could actually harm the economy by making non-commodity exports even less competitive and further tightening the squeeze on domestic manufacturers already struggling with 20%+ interest rates. Instead of a recovery, Russia faces an “inflationary overheat” where more money enters the system, but the supply of goods remains restricted by sanctions.