Premier Dmitry Medvedev spoke at the 2016 Gaidar Forum “Russia and the World: Looking to the Future” which was organized by the Russian Academy of National Economy and Public Administration under the President of the Russian Federation (RANEPA) yesterday. He admitted that in the context of the crisis, reforms were needed, and reforms were always painful. However, it was not a way out to put life on ice. “We started 2015 with fluctuations of the currency rate, with dire forecasts about an economic fall; we even heard promises from abroad to tear our economy apart. However, it didn’t happen. We managed to stay out. The economic situation is controllable; there are positive trends. For example, Russia is one of top 10 countries with the smallest state debt and with the greatest gold and foreign currency reserves. The outflow of the capital reduced,” Medvedev stressed and voiced three main factors which enabled him to speak about a stable situation in the economy. These are the stable work of the banking sector, a recovery of credit activity, and a balanced budget, despite an outflow of oil-and-gas revenues from the country.
Meanwhile, Vladimir Mau, a member of the Presidium of the Economic Council under the President of the RF, Rector of the RANEPA, stated ahead of the Forum that the Russian economy is not the worst in the world. “Bloomberg announced Russia's economy as one of the worst. By what parameters is it one of the worst in the world? If by gold and currency reserves, the situation is generally good. If by inflation, then inflation, obviously, will significantly decline. If by the fiscal deficit, even if it will increase a little, it will still be significantly lower than in many other countries, and in Saudi Arabia, according to the latest estimates, it will amount to about 20% of GDP. Even in the worst period of the 1990s we did not have such a budget deficit. The national debt of Russia is 15%, the external debt is 2% of GDP, in other words, there is almost none of it, it vanishes. Unemployment, in general, at the level of the US is slightly higher and much lower than in Europe.”
Extreme dependence on oil price fluctuations, considerable uncertainty of our development, and the fact that we don't know the prospects for growth are quite clear are main problems of the Russian economy, according to Mau. “We were not declared to be the worst economy in 2009,when the decline in GDP was around 8%. In 2015 it was 3.8%. It is obvious that in 2016 it will be somewhere around 0. In the past year, we have responded much better than was expected at the end of 2014 to the challenges that the Russian economy faced. Expectations at the end of 2014 were simply disastrous. The expectations of populism, the expectations of spending reserves to maintain the exchange rate, the expectation of the uncontrolled growth of the budget deficit were quite high. In the past year, our budget deficit amounted to 1.5%, again, not many countries can afford that currently. We have preserved the reserves, but yes, we paid for it with exchange rate fluctuations,” the expert stated.
He believes that the government's willingness to sacrifice the current popularity for the sake of long-term factors of stability is very worthy behavior. “Not so many authorities are ready to make the current problems a sacrifice for long-term sustainability. In this sense we had very positive results,” Vladimir Mau is sure.
