Economic growth may be launched this year in Russia

This year Russia will finally overcome the economic fall, and from 2017 its economy will grow, the Minister of Economic Development of the RF, Alexei Ulyukayev, promised yesterday. The deputy director of the Institute of Economic Forecasting of the Russian Academy of Sciences, Alexander Shirov, believes there are chances for such a development: “We have experienced a heavy monetary and financial shock at first, and then an economic shock, still, a set of factors was formed in the economy, which allows us to obtain positive dynamics of the GDP in the short term, in other words in up to one year, and continue the modernization of the current economic policy on the basis of that.”

The expert stated that according to the results of 2015 there was a rise in yields in the majority of economic activities. Despite the fact that the economy was falling, the financial and economic state of enterprises at least did not get worse. A moderate increase in prices for energy resources, in particular, contributed to this. If the prices in the manufacturing sectors of the economy grew at a faster pace, prices for intermediate goods and energy resources, first of all, grew much more slowly. It certainly had a positive impact on the state of the finances in the most important sectors of the economy and industry.

“As a result of this quite deep recession, one way or another, an increase in the reserves of competitive facilities occurred. Unlike the situation of 1998, competitive facilities are free today. That is, those facilities that had been put into operation in the period from 2008 to 2015. These facilities are concentrated primarily in such activities as the production of building materials, the chemical industry, the metallurgical industry, partly machine building. And certainly the quality and volume of these facilities allow for a significant increase in production. The question is whether the products of these sectors are in demand,” Shirov says.

Moreover, he states that the number of employed persons corresponds to higher production parameters: “Companies are cutting employees much more slowly than they could have, considering the decline in production we had. And this is also a plus, because if we are talking about recovery growth, then there is no need to search for people on the market in order to provide it, they are already at their workplaces. It is necessary to load them with work.”

The third positive factor, according to the expert, is that there was an import ousting, as a result of the monetary and financial shock the economy has experienced: “A large number of imports was ousted from the market, and this, in a certain sense, frees up space for economic growth. This way, I claim once again, that there are opportunities to launch economic growth in the current year.”

Shirov believes that imports were certainly the most important limiting factor of economic dynamics in the period of slowing economic growth in the period from 2012 to 2015. According to the results of 2015, imports have declined by about 6%, and without a doubt this is a space that can be used by competitive domestic enterprises to increase production volumes.