MOSCOW, November 20 (RIA Novosti) – Russia’s capital outflow may reach $70 billion in 2012, more than the previous forecast of $60-65 billion, Deputy Economic Development Minister Andrei Klepach said on Tuesday.
“We’ll specify the figure by December. Perhaps, it will be slightly larger [than the Central Bank’s estimate of $67 billion] at $70 billion, or may be less” Klepach said.
The Economic Development Ministry has previously forecast Russia’s capital outflow at $60-65 billion in 2012. Net capital outflow from Russia hit $57.9 billion in January-September 2012, according to the Bank of Russia.
As in the previous year, the growth of balances on foreign currency accounts abroad held by Russian banks and non-resident banks working in Russia was the main channel of capital outflow from Russia, Klepach said, citing the example of the Russian subsidiary of Italy’s Unicredit Bank, which helped the parent company to cope with its financial difficulties amid the intensifying eurozone debt crisis.
“The second largest channel, which dominated for most of this year, is related to Russian companies, which either repaid their [foreign currency debts] or kept part of their foreign exchange proceeds abroad,” Klepach said, adding uncertainty with investment in Russia and the expectations of the ruble’s devaluation were the main factors for capital outflow.
Capital flight from Russia peaked at $133.7 billion in 2008 when the global economic crisis broke out, falling to $56.1 billion in 2009. Capital outflow from Russia stood at $80.5 billion in 2011 compared with $34.4 billion in 2010.
Investors usually avoid emerging markets like Russia in periods of turmoil, preferring to seek safe havens in developed markets.