Shuvalov: worst for Russian economy in past

The worst times for the Russian economy are in the past, the First Russian Deputy Prime Minister Igor Shuvalov said at the Russia-Singapore business forum.

"We believe that the worst times for the Russian economy are in the past, we have been going through a difficult period since the first quarter of 2015, one might even say that since the last quarter of 2014," TASS cited him as saying.

According to the first deputy prime minister, the complexity of the Russian economy was due to a fall in prices for the main export commodities, including raw materials, the devaluation of the ruble and the anti-Russian sanctions of the West.

Commenting on the development of entrepreneurship in the country, Shuvalov said that the government seriously intends to "break the monopoly blocks" to create a competitive business space.

Shuvalov pointed out that the Russian economy is more or less healthy now.

According to Shuvalov, although insufficient for the Russian economy, any growth is a welcome development following GDP declines of 0.6% to 0.7% expected by the end of 2016. 

"We are already seeing growth, albeit slow. Month to month, the Russian economy is growing. We hope that in the coming year this growth will be 1% or more," Shuvalov stressed. 
Next year could see renewed growth in population earnings and consumer demand in Russia, Igor Shuvalov said. 

"Falling incomes are over. We hope that next year this will be a trend for all sections of society, that earnings will grow. And consumer demand should revive next year," Sputnik cited Shuvalov as saying.

First Deputy Prime Minister noted that the raw materials sector is not the future of the Russian economy. "The raw materials sector will keep developing, but it is not worth spending the funds raised from it on budget expenditures," he said.

Advisor on macroeconomics to the CEO of the 'Opening-Broker' brokerage house, economist Sergey Hestanov, speaking to Vestnik Kavkaza, named the weakening of the ruble as one of the mechanisms to adapt the Russian economy to the new conditions. "The weakening of the ruble strongly supported domestic producers. Almost every enterprise which somehow compete with imports, gained some advantage due to the weakening of the ruble," he noted.

It also helped to stabilize the financial system. "The decline of the ruble helped to significantly fill the federal budget, which has contributed to the fact that all sectors of the financial system were supported. Therefore, the Russian Central Bank's policy played the main role in the stabilization of the Russian financial system," the economist recalled.

Of course, they were to pay a certain price for it, in fact , the decline in incomes  of citizens was a reverse side of the weakening of the ruble. "So far, unfortunately, it is too early to confidently say that the decline in incomes of citizens stopped - we should wait summarizing the official results of the fourth quarter of 2016. But it is very likely that in 2017 the decline in the Russian economy will come to an end and we will see a small recovery growth," Sergey Hestanov stressed.

The expert pointed out that after the final overcoming the crisis "we will face a problem of finding the driver of the Russian economy's future growth". "If in the period from 1999 to 2014, the increase in oil prices was the main driver, now we should not expect that the oil will push the Russian economy forward once again. Therefore, searching for source of future economic growth is the main task," the advisor on macroeconomics to the CEO of the 'Opening-Broker' brokerage house concluded.