April 5 (UPI) -- Even if crude oil prices move above $60 per barrel, the Russian economy likely won't expand much more than 1 percent, the head of the central bank said.
Russia's economy lingered in recession last year and the national currency, the ruble, declined in value after crude oil prices dipped below $30 per barrel. So far in April, crude oil prices have posted steady gains amid signs the global market was returning to balance following a long period of oversupply. The price for Brent crude oil was marching toward $55 per barrel in early Wednesday trading.
Russian Central Bank Chief Elvira Nabiullina said the national economy is becoming less dependent on crude oil prices and growth won't improve much, even with a major rally in crude oil prices.
"The dependence of Russia's economic growth rates on the oil price is not very high," she was quoted as saying by Russian news agency Tass. "A high price within the range of $40 and $60 (per barrel) will add around 1 percentage point to the growth, not more."
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In March, the bank chief said the economy will be on the positive side of growth provided oil stays above $40 per barrel. The number of economic sectors expected to expand this year is not much greater than those in contraction, but losers are outnumbered.
Russia is party to a multilateral deal, led by the Organization of Petroleum Exporting Countries, that calls for a ceiling on crude oil production in an effort to balance the market. Russia's compliance has been fluid, though overall compliance is strong.
After the deal was brokered in November, Nabiuallina said recovery for the Russian economy will be slow with only minor growth for gross domestic product expected this year. The economy will be stable, regardless of the price for crude oil.
"Whatever the price of oil, without structural transformation we'll stabilize at the economic growth level of 1.5-2 percent," she said.
The Russian Central Bank in March lowered its key lending rate by a quarter percent to 9.75 percent per year, the first cut since September. In a statement justifying the move, the bank's board of directors said inflationary expectations are lower, though recovery is emerging.
