* Lower oil price to cost Russia $90-100 billion a year
* Cost of Western sanctions put at $40 billion
* Some analysts gloomier about sanctions impact
(Adds context and comment)
MOSCOW, Nov 24 Lower oil prices and Western
financial sanctions imposed over the Ukraine crisis will cost
Russia around $130-140 billion a year - equivalent to around 7
percent of its economy - Finance Minister Anton Siluanov said on
His comments are the latest acknowledgement by Russian
policymakers that sanctions restricting borrowing abroad by
major Russian companies are imposing heavy economic costs. But
in Siluanov's view, the fall in oil prices is the bigger worry.
"We're losing around $40 billion a year because of
geopolitical sanctions, and about $90 billion to $100 billion
from oil prices falling by 30 percent," he told a news
"The main issue that affects the budget and economy and
financial system, this is the price of oil and the fall in
monetary flows from the sale of energy resources."
Official forecasts suggest Russia's gross domestic product
is likely to be around $1.9-2.0 trillion this year, at average
Siluanov's estimate of the cost of lower oil prices is in
line with analysts' rule of thumb that each $1 fall in the oil
price lops around $3 billion off export earnings. The oil price
has slumped from nearly $115 per barrel in June to around $80
Oil and gas account for around two-thirds of Russia's
exports, making the balance of payments highly vulnerable to oil
Natalia Orlova, chief economist at Alfa Bank, said the
$90-100 billion estimate did not take into account the effect of
the weakness of the rouble, partly caused by the fall in the oil
price, which would help to compensate the loss by boosting
exports and curtailing imports.
The rouble has lost 25 percent of its value against the
dollar since June, and Orlova said the net impact of lower oil
prices on the economy would be around $40 billion.
But when it comes to the cost of sanctions, Siluanov's
estimate of $40 billion may be conservative, based on the direct
cost to companies unable to borrow abroad rather than the
overall impact on investor behaviour.
Other analysts have arrived at gloomier estimates, taking
into account the indirect cost of sanctions and overall
East-West tensions linked to Ukraine.
In its latest monetary strategy, the central bank forecast
that net capital outflow this year would be $128 billion, more
than double the $61 billion seen in 2013, as a result of "the
events in Ukraine and the introduction of sanctions".
Last week, influential former finance minister Alexei Kudrin
said the impact of "formal and informal" sanctions on the rouble
- and by implication the wider economy - was comparable to the
impact of lower oil prices, and that foreign investor confidence
would take seven to 10 years to recover.
(Reporting by Elena Fabrichnaya; Writing by Jason Bush and
Alexander Winning; Editing by Kevin Liffey)