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Capital outflow will stay at last year’s level - regulator

The capital flight from Russia is likely to be at the same level as last year at $84 billion, far beyond the forecasts of the Central Bank, Russia’s Deputy Minister of Economic Development told RT.

“The third quarter numbers suggest that the outflow is unfortunately continuing and accelerating,” said Sergey Belyakov, Deputy Minister of Economic Development. In the third quarter of 2012 the capital flight from Russia increased to $13.6 billion, compared to $9.7 in the second quarter, according to the data of the Central Bank of Russia. “I think that total level of outflow this year will be at the level of last year, maybe a little bit less”.He went on: “Capital is leaving the country as everyone is consolidating revenues in the current environment ant that should be kept in mind”. Russia’s economic regulators have drifted apart in their capital outflow forecasts. Earlier this year country’s Finance Ministry and the Central Bank expect this year’s outflow to be at $60 to 65 billion. Capital outflow from Russia was about $84 billion in 2011, more than double the figures for 2010. The poor investment climate and corruption are usually considered the main causes for the lower investment attractiveness of Russia, but Belyakov believes there are more reasons for the capital flight.“This is due to the number of factors, and they are not always related with an unfavorable business climate, because we see inflow of foreign investment. Maybe it doesn’t come at the pace we would like, but it is coming,” Belyakov explained. The capital outflow used to a major headache for Russian economic regulators as the money necessary for the country’s development flows to other markets. Meanwhile some experts do not consider capital flight a problem as the capital outflow decreases inflation risks and balances liquidity.