The Russian economy continues to recover from the repercussions of “Corona”
The ruble is improving with increased oil production and gas exports
Saturday – 21 Shaaban 1442 AH – 03 April 2021 AD Issue No. [
The Russian economy has continued its journey to recover from the recession caused by the Corona epidemic (Reuters)
Moscow: “Asharq Al-Awsat”
And Bloomberg agency quoted the Federal Statistics Service as saying that the country’s gross domestic product fell by 1.8 percent compared to the corresponding quarter of last year. Economists had expected a decline of 2.2 percent. Expectations for a contraction of the economy have also been revised to 3 percent for the whole of 2021, compared to previous expectations of 3.1 percent.
It is noteworthy that the economy of Russia, which is one of the largest sources of energy in the world, contracted less last year compared to its counterparts in other countries, as the country imposed lighter measures to curb the spread of the “Covid-19” pandemic following an initial shutdown. The share of the Russian service sector in total output is relatively small. According to the statistics service, inflation, which was caused by the rise in global food prices and the weakening of the Russian currency, the ruble, accelerated its pace further in the midst of a recovery in consumption rates, which prompted the Russian Central Bank to increase key interest rates last month, for the first time since 2018. Further increases are expected. Russian Economy Minister Maxim Reshetnikov said, according to the Russian news agency “Interfax”, that the government will reduce its forecast for the country’s economic growth in 2021 from 3.3 percent, following the Statistics Service’s report on the decline of the rate of contraction last year.
Concurrently, the Russian ruble rose to 76 against the dollar in tepid trading on Friday, recovering from its lowest level in a week that it reached the previous day, after the OPEC + group, which includes major oil producers in the world, agreed to reduce production cuts.
By 0725 GMT, the ruble had risen 0.3 percent against the dollar to 75.99, pulling away from its lowest level in a week of 76.4 that touched Thursday evening.
In light of the lack of momentum with the closure of major exchanges over the Easter weekend, the ruble took into account a 3 percent increase for Brent crude, the global benchmark for Russia’s main exports. Brent last traded at $ 64.65 a barrel.
Oil prices rose despite OPEC +’s decision to ease production restrictions by 350,000 barrels per day in May, an additional 350,000 barrels per day in June, and an additional 400,000 barrels or so in July.
But the ruble is still low from levels around 73 per dollar, which it recorded shortly before US President Joe Biden said that Russia will pay the price for its interference in the US elections and cyberattacks, charges that Moscow denies. Against the euro, the ruble rose 0.3 percent to 89.56 rubles.
In a related context, Russia’s production of oil and gas condensates increased to 10.25 million barrels per day in March, from 10.1 million barrels per day in February, according to Reuters calculations based on a report reported by the Interfax news agency based on data from the Ministry of Friday energy.
The recovery of Russian oil production follows a drop in February, when industry sources said that challenges in resuming production from aging fields were exacerbated by severe winter weather. Interfax reported that production of oil and gas condensate recorded 43.34 million tons in March, compared with 38.56 million tons in February. According to an agreement last month with the OPEC + group, Russia is allowed to increase its crude oil production even more, by 130,000 barrels per day in April.
The OPEC + group, the alliance that includes the Organization of the Petroleum Exporting Countries (OPEC) and other major oil producers, including Russia, decided, on Thursday, to reduce production cuts and address the faltering demand in light of the pandemic, from May to July.
Russian gas producer Gazprom said, on Friday, that its natural gas exports to non-Soviet countries rose 30.7 percent year on year, to reach 52.7 billion cubic meters between January and March. It also stated that its natural gas production increased 10.5 percent year-on-year to 136.2 billion cubic meters in the first three months of this year.