Credit Suisse: the position of the head of the Ministry of Finance of Russia is vulnerable due to spending by the NWF in which, among other things, he assessed the situation on the Russian market and the prospects for the Russian economy. The text of the report is at the disposal of Lenta.ru.
The experts named the possible reshuffle in the government as the main intrigue of the next year. At the same time, the post of Minister of Finance, which is occupied by Anton Siluanov, in their opinion, is the most vulnerable. The reason for this conclusion is the alleged start of increased investment from the National Welfare Fund (NWF).
The authors of the report believe that the focus of fiscal policy in Russia has shifted from an extremely conservative one to one focused on economic growth and social support of the population, which requires funds. The government is facing pressure from businesses to invest in specific projects, and the execution of such requests could lead to increased spending early next year and exceeding the planned spending for the entire year. Thus, the head of the Ministry of Finance will have to balance between two incentives.
According to the Swiss bank, annual inflation in Russia will stop at 7.9 percent, which coincides with the upper limit of the Central Bank's estimate. At the same time, experts expect that inflation in Russia will return to the target level of four percent as early as next year, which is more optimistic than other estimates.
Credit Suisse is betting on further monetary tightening. The key rate may rise to 8.5 percent and stay at this level for most of next year or even the whole year.
At the same time, the bank expects that in 2022 Russian shares, along with other shares of emerging markets demonstrate attractive returns. The market has good fundamentals, primarily due to the rise in energy prices, but the situation is complicated by geopolitical risks.
The latter fact played an important role in the situation on the Russian market on the eve of November 22. Against the background of reports of a possible Russian invasion of the territory of Ukraine, the Moscow Exchange index fell by 3.58 percent per day – the worst result since April 15, 2020, when the oil crisis flared up.
At the end of October, it became known that the Russian Ministry of Finance proposed to limit spending from the NWF on new oil and gas projects that are contrary to the principles of sustainable development. The department believes that due to the global energy transition, some of them will be deliberately unprofitable.