Prospects of economic growth in Russia are good: Central bank chief | IMF Annual Meetings 2019
International Monetary Fund predicts GDP growth for Russia up to 6%, with effective economic reforms
According to the forecast of the International Monetary Fund, in 2013 the growth rate of the world economy will be approximately 3.5%. In 2014, they will grow to 4%. GDP growth will be recorded in all major economies and regions of the world, with the exception of the euro area, where the recession will continue.
The upbeat outlook is largely due to the hope that the United States will cope with fiscal risks. The IMF stresses that the US authorities have taken the necessary measures, but their effective implementation is necessary.
This is how Odd Per Brekk, the head of the IMF’s permanent mission in Russia, sees the near future.
Russian “growth model”
Breck stressed that Russia traditionally belongs to the group of countries that are more sensitive to changes in the perception of risk in international markets. So, fluctuations in world oil prices will have a direct impact on exports and on government revenues of the Russian Federation..
But the IMF associates the slowdown in economic growth in Russia, nevertheless, with internal reasons. The Russian economy is expected to grow at a moderate pace in 2013 (3.7%).
The Russian government sets the task of ensuring higher rates of economic development. However, Breck points out that the Russian ‘growth model’ of the last decade may no longer be able to provide this: “During these years, the main drivers of growth were increased capacity utilization and some efficiency gains, and, of course, rising oil prices, not investment in new production facilities “.
Tasks of Russia
Odd Per Brekk believes that it is impossible to achieve sustainable long-term growth by stimulating domestic demand. This will only lead to “pressure on domestic prices and the balance of payments.” “Instead, economic policy should aim to stimulate productive investment in new capacity,” says Breck..
Russia begins to play an increasing role in the global economy
Odd Per Brekk, Head of the IMF Resident Mission in Russia
The IMF’s recommendations are traditional: ensuring macroeconomic stability, the need for a developed and stable financial sector and improving the investment climate.
Breck points out that Russia has already taken the right approach, adopting a “fiscal rule” and ensuring a gradual transition to formal targeting of inflation in order to anchor it at a low stable level.
Brekk recalled that not so long ago Russia was able to rise in the World Bank’s Doing Business ranking, from 118th to 112th place. “But this only underlines how much remains to be done,” the expert notes..
The correspondent of the Russian service “Voice of America” asked Brekka to assess the negative scenarios for the development of the Russian economy, recently presented at the forum in Davos.
“We also present positive scenarios. But effective implementation of these scenarios is needed, and this depends on economic policy, on some serious actions. In the study, we highlight the significant potential of Russia and the opportunity to follow the path of sustainable growth in the near future, “Brekk replied..
“Russia is starting to play an increasing role in the world economy,” summed up the head of the IMF Resident Mission..