REUTERS
Chief of the Russian Sberbank German Gref forecasts a difficult year for the country’s economy and its banking sector, according to RBC news agency.
The next year will be very difficult both for the Russian economy and for Sbrebank, said the head of the state-owned financial institution, RBC reports.
"Most likely, with such oil prices, earlier forecasts regarding economic growth will not come true. Perhaps, the fall will be a bit more substantial than we expected, but I see nothing extra-critical," Gref said.
On Tuesday, December 15, Brent crude was at $38.8 per barrel at the middle of trade.
Read alsoBank of America: Russia's currency may drop to RUB 168 per dollarAccording to Sberbank’s CEO, the situation will be difficult for the regional budgets, which will have to greatly increase the debt, and for the federal budget, which will be a source of covering the deficit of regional budgets. Perhaps the government will have to think either about building up deficit, or about sequestration, according to Gref.
"There will be nothing worse, other than we are expecting, but it won’t be better, either, and that's the main problem. Regardless of oil prices, we have left behind the threshold of critical decisions to develop our economy. If there is no reform, unfortunately, we cannot expect the situation to improve in the coming years," said Gref.
Gref repeated that he forecast one of ten banks disappear during the next year.
Read alsoOil tumbles toward 11-year lows on worsening glutEarlier, the head of Sberbank said that he evaluated the current situation on the market as a large-scale banking crisis. "What we see now is a large-scale banking crisis," he said.
Gref noted that over the past 20 years, this is the most difficult and protracted crisis in the Russian banking system.