On 13th December, VTB Capital arranged a press briefing for key international and Russian media. The journalists were addressed by Alexey Zabotkin, Head of Investment Strategy at VTB Capital; Maxim Oreshkin, Chief Economist for Russia at VTB Capital; and Petr Grishin, Head of Macro Research at VTB Capital.
The main topics of discussion included 2012 financial results and the prospects for economic growth in 2013. According to VTB Capital’s analysts, reforms in monetary and fiscal policy will allow for a more flexible and stable macro-economic structure, which will lead to lower volatility of growth and inflation.
According to VTB Capital’s forecasts, Russia's economic growth in 2013 will average between 2.0-2.2% of GDP if the price of Brent crude oil stays at USD $95 a barrel. It will grow between 2.5-2.7% if the price of Brent stays at USD $110 a barrel. Economic growth will be supported in 2013 by the projected easing of monetary policy and the launching of the infrastructure bonds mechanism. Positive development will slow down inflation, which at the end of 2013 could reach between 5-6%.
The ruble early next year is expected to strengthen and could reach 34 rubles for a dual currency basket, but in the 2H 2013 in the event of a decreasing price of Brent crude oil, the ruble may exceed the levels of mid-2012.
In addition, VTB Capital predicts further decline in yields on long-range segment of the OFZ curve by 30-50 basis points from current levels during Q1 2013, which will continue to be associated with the liberalization of the domestic market to foreign investors. In the spring of next year, the dynamics of ruble assets with fixed income will be much more determined by the rate and extent of monetary policy easing.
Overall, VTB Capital analysts praised the measures taken by the Russian Ministry of Finance and the Central Bank, to promote the interest of international investors in the Russian securities market.
Head of Press