Russian ex-minister predicts 3% economic growth in 2013

PanARMENIAN.Net - Economic growth in Russia is unlikely to surpass 3% in 2013 due to a weak external environment, elevated inflation, flat oil prices and sluggish domestic demand, former Finance Minister Alexei Kudrin said, according to RIA Novosti.

“Economic growth in Russia is currently not supported by the oil-and-gas sector, the growth rate is declining as January brought only 1.6% year-on-year,” Kudrin said in comments on Russia 24 television on Tuesday.

“We can only hope to reach 3% or may be 3.3% [in 2013], although I think we will have to work really hard to approach 3%,” he said.

The former minister earlier said GDP growth below 3% meant stagnation while the economy’s expansion by 3-4.5% suggested weak and unstable growth.

According to the official forecast by Russia’s Economic Development Ministry, the country’s GDP growth is expected at 3.6% this year and 4.3% in 2014. Meanwhile, the Russian government is planning to keep inflation at 5-6%.

Russia’s GDP grew only by 3.4% last year, the lowest since the deep recession of 2009, with weak demand for Russian exports in Europe and faltering investment.

Kudrin said that Russia cannot rely anymore on consumer demand as the main booster of economic growth, and must improve investment climate and diversify its economy in order to stimulate further GDP growth.