November 31, the Organization of the Petroleum Exporting Countries (OPEC) agreed to cut their oil production by 1.2 million barrels per day in order to raise global prices. Global oil prices increased by 15% after the decision had been made, with Brent crude rising from $46 per barrel up to $53.77 per barrel next day, and they kept growing in December – 56.94 (Dec 29). Now the analysts predict the oil prices to be at the level of $60 in 2017. Just to remember – in January, 2016, Brent crude price was $32.1 per barrel. As ruble has been strongly correlated with oil prices, it strengthened in December and gained 7% against USD and 8,5% against euro. In 2016, it gained against USD more than 27% – from 83.6 rubles per dollar January 22, 2016 to the official rate of the Russian Central Bank on December 29, 2016 60.67 rubles per dollar.
According to the Russian Ministry of Economic Development, in 2016 the consumer price inflation is estimated to be 5.6%, which is slightly lower than it was officially forecast. In annual terms, the inflation rate is declining steadily since July of this year – from 7.5% in June to 5.8% in November. Russia’s GDP fell by 0.6% during 11 months of 2016. Just to compare: in 2015, GDP fell by 3.7%, and inflation was 12.9%.
According to the Ministry of Economic Development, the real disposable household income, i.e. the amount that remains in the hands of the citizens after the payment of all required payments, will decrease more than expected. It was forecast to be 5.6% decrease, now it is estimated to be 5.8% fall.