IMF: Russia should "start saving for a rainy day"September 28, 2011 - 12:12 AMT PanARMENIAN.Net - Russia should "start saving for a rainy day," International Monetary Fund (IMF) mission chief for Russia Juha Kahkonen said in an interview posted on the IMF website. Russia's non-oil budget deficit currently stands at some 6% of GDP, above the level which the Russian government and the IMF see as sustainable. "And so it's a need for Russia to start saving for a rainy day," Kahkonen said. The IMF official cited forecasts from the organization's experts, who expect the economic growth to stand at 4.3% this year and 4.1% in 2012, with inflation being above 7% in both years. However, if economic policies are not strengthened, Russia's growth may drop to below 4% in the midterm. "These are not the impressive numbers for Russia, because Russia used to have average growth of 7% before the global crisis, and it's also benefiting from high oil prices," the IMF mission chief said. "Russia has great potential, and could have growth of 6% or more on a sustained basis. This would require that economic policies are redirected toward more focus on economic stability and less reliance on oil," he said. The official said Russian economy faces two main risks, both external - the Euro area crisis and the global economic slowdown. "Russia is not very much exposed to the Euro area government debt, but if major European banks get into difficulty, this would create funding problems for Russian banks," he said. "An even bigger risk is if there is a global downturn and oil prices fall sharply. This would reduce Russia's exports and budget revenue and trigger a recession." He said Russia would need to "decisively" focus its monetary policy on inflation and better oversight of the financial sector. The country also needs a better business climate to speed up growth, RIA Novosti reported. Top stories Yerevan has dismissed Turkey’s demand to shut down the Armenian nuclear power plant as “inappropriate”. Armenia will loan 2.9 billion drams to Nagorno Karabakh (Artsakh), according to a draft government decision. The Ministry of Ecology and Natural Resources of Azerbaijan has “strongly condemned” Armenia’s decision. Kerobyan has said that for the first time in the history of Armenia, the volume of foreign direct investments amounted to about $1 billion. Partner news | The Power of One Dram to benefit Road of Life charity The companies inform that the May beneficiary of The Power of One Dram is the “Road of Life” charitable organization. Ucom General Director gives lecture at French University in Armenia The General Director of Ucom Ralph Yirikian delivered a lecture at the French University of Armenia. Kazakhstan welcomes Yerevan, Baku’s agreement to meet in Almaty Kassym-Jomart Tokayev has welcomed the agreement of Baku and Yerevan to hold negotiations in Almaty. Armenia offers to temporarily host, preserve Gaza manuscripts The Armenian Foreign Minister has said Yerevan is ready to help preserve manuscripts from the conflict zone in Gaza. |