International rating Agency Fitch Ratings has changed the forecast of Russia’s rating from “stable” to “positive.” Thus, the Agency expects to improve macroeconomic stability and economic resilience to shocks.
Its decision, Fitch explains visible changes in Russia’s economic policy: the increased flexibility of the ruble exchange rate, targeted inflation, a prudent fiscal strategy reflected in the approved budget rule.
Of messages the Agency shows that inflation in Russia in 2018-2019 year will be 4.5%, an unprecedented low level for the country. Oil revenues will probably be about 36% of total revenues, far below the average level 2011-2014 (if it was 50%).
The increase of Russia’s GDP in 2017, Fitch forecasts by 2% and on average by 2.1 percent in 2018-2019. The degree of influence of geopolitical factors, including the conflict in Eastern Ukraine and the expansion of U.S. sanctions against Russia, is estimated by Fitch as “moderate”.
In Fitch believe that President Vladimir Putin maintains a high chances of re-election in March 2018, although his candidacy has not yet been officially confirmed. After the election, Russia must implement reforms to improve the growth rate of the economy, but there is uncertainty associated with the actual program and the pace of reforms after the elections, says Fitch.