Capital outflow from Russia in 2012 could run to some $70 billion

Russia's Economic Development Ministry allows that net capital outflow from the country this year could top the ministry's forecast of $60-$65 billion and the Central Bank's prediction of $67 billion, amounting to around $70 billion in all, Deputy Economic Development Minister Andrei Klepach told the press.

"We will update the estimate for the year in December. It could be that it [the Central Bank forecast] will be a little more at up to $70 billion, perhaps a little less," Klepach said.

The Central Bank projects net capital outflow from Russia amounted to $57.9 billion in January-September, and the Economic Development Ministry estimated outflow at around $5 billion for October. Net capital outflow from Russia was about $81 billion in 2011.

Speaking at a seminar for the heads of state legislative bodies, Klepach said that the government is not planning to impose any bans on the movement of capital out of the country.

As for reasons as to why capital is leaving Russia, Klepach mentioned three factors. Last year, he said, the main channel for capital outflow was explained by the increase in forex accounts abroad held both by Russian banks and non-resident banks operating in Russia. In 2012, he said, the main outflow was from Russian companies paying down debts, and there was also the factor that some sales revenues were being left abroad possibly because of uncertainty surrounding investment in Russia or expectations of a weakening ruble exchange rate. The third reason, he said, was growing forex savings by the population, including the taking of these savings out of the country.

One of the main tasks for the middle-term perspective, Klepach said, is changing capital outflow trend. He pinned his main hopes on measures taken to improve the country's entrepreneurial climate.

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