Russia’s Economic Development Ministry revised its economic forecast. It was presented by Economy Minister Maxim Oreshkin at a meeting of the State Duma’s Committee on Budget and Taxes.
Russia’s gross domestic product was expected to rise by between 1.6 and 2.1% in 2018. In money terms, as calculated by the Ministry of Economic Development, it will exceed 100 trillion rubles.
The ministry expected inflation to stand at between 2.7 and 3.2% at the end of 2018, with 2.1-2.2% in June. The current inflation is 2.4%.
The average dollar exchange rate in the new scenario is projected at the level of 60 rubles. The ministry expects the average oil price in 2018 at the level of $65-70 per barrel.
"Our forecast now comprises the figure of $61.4 per barrel, but taking into account the recent events, you can expect an average oil price level even above this value - in the range of $65 to $70 per barrel," TASS cited Oreshkin as saying.
The incomes of the population will increase by 3.4-3.9%.
The vice-rector of the Academy of Labour and Social Relations Alexander Safonov, speaking to a correspondent of Vestnik Kavkaza, noted that 100 trillion rubles of GDP at an annual growth of 2% is a pessimistic forecast, because such a low figure will not allow the state to fulfill the task of President Vladimir Putin's new 'May decree' - entering the top-5 of largest economies.
"Today we have the sixth GDP per capita in purchasing-power-parity terms, Indonesia and a number of other countries are catching up with. According to our estimates, we need an annual growth of 6.4% in order to enter the top five and gain a foothold there. But our inflation rate is within 2%, that is, there is nothing to be happy about. This rate of economic growth means the preservation of all those problems that we had in past years - lack of funds for social policy, lack of funds for large investment projects related to construction of roads and communications," he explained.
Another negative thing is that most of this growth will be associated with an increase in oil prices. "Thus, we continue to depend very much on the situation in the raw materials markets. And if we do not start to achieve high rates of economic growth, the problem of a possible increase in the retirement age will become acute immediately. There has been no adequate economic driver yet, which would create the necessary jobs, but we really need it. The forecast for Europe as a whole is 3.2-3.4%, we are lagging behind it, and a fancy figure of 100 trillion rubles will mean that the share of the Russian economy in the global economy will continue to decline," Alexander Safonov warned.
The head of the department of stock markets and financial engineering of the Faculty of Finance and the Banking Business of RANEPA, Konstantin Korischenko, stressed that 100 trillion rubles of GDP is nothing more than a psychological barrier. "This threshold means nothing itself, but the forecast for GDP growth by 2% is more important. It sounds quite optimistic, because according to forecasts of international organizations, such as the IMF and various independent analysts, this figure was not expected. The level of 2% and higher was not sounded until today - they spoke only about 1.5%," he said.
"Perhaps the minister of economy has more information than analysts, and therefore his estimate may be more accurate. The reason for this forecast of 2% may lie in significantly higher oil prices," Konstantin Korishchenko expects.
