(Corrects third paragraph to say that oil price forecast not GDP forecast was described as “conservative”)
MOSCOW, Jan 31 (Reuters) - Russia’s economy ministry said on Saturday it expected gross domestic product to fall 3 percent this year, more optimistic than many analysts’ forecasts of a 4-5 percent drop.
The economy has been hit by a sharp fall in oil prices and sanctions imposed on Moscow for its role in the Ukraine crisis, leaving Russia facing its first year of recession since 2009 in the wake of the global financial crisis.
Economy Minister Alexei Ulyukayev told Russian news agencies that the 3 percent was based on an oil price forecast of $50 per barrel, which he called a “conservative” figure compared with more upbeat consensus forecasts, Interfax reported.
Despite that the Ministry’s economic growth forecast was more optimistic than analysts polled in late January by Reuters who saw the Russian economy falling by 4.2 percent this year.
Moody’s rating agency said earlier this month that the GDP fall may by as much as 5.5. percent. Analysts at Danske in Copenhagen said in a recent note GDP may contract by 8 percent.
The ministry’s $50 per barrel oil price forecast was half of the $100 per barrel the ministry envisioned last summer in its economic scenario for this year..
Inflation, according to Ulyukayev, would not ease this year and would hit 12 percent by the end of 2015 -- compared to 11.4 in 2014. Net capital outflows, spurred by a falling rouble and increased tension between Moscow and the West over Ukraine, would probably reach $115 billion, he added.
Capital investment -- cash invested in firms’ tangible assets such as building and infrastructure -- was likely to fall by 13 percent this year and retail sales by 8 percent, Ulyukayev said. (Reporting by Polina Devitt, Maria Kiselyova, Darya Korsunskaya and Alexander Winning; Writing by Lidia Kelly; Editing by Andrew Heavens and Jason Bush)