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Russian Economy Doomed to Inertia
Experts forecast no breakthrough for Russia. Russia’s economy is doomed to dragging in the middle term.
This week analysts from various independent expert organizations as well as from the RF Economic Development and Trade Ministry and Russian Academy of Science were meeting in different places and at different time, but always focused on one and the same problem. As a result, the 2004 economic indicators were generally estimated as not so bad. For instance, the RF Economic Development Ministry’s senior official Andrei Klepach said Wednesday “Despite all its dramas, 2004 happened to be better than many expected.” According to Klepach, the GDP grew 6.9 percent in 2004, exactly in line with the last outlook of the ministry. Andrei Belousov, an economic aid to Russia’s PM Mikhail Fradkov, appeared to share this opinion. According to Belousov, the economy not only manifested fairly good results, but also became more diversified. “The rates in engineering in 2004 were the highest over the last four years,” Belousov said. Actually, engineering and metal processing were past year’s leaders. Under the data promulgated by Rosstat (Russia’s Statistics Service), such industries grew at 11.7 percent pace.
However, the independent experts are not so optimistic. In particular, Yevgeny Gavrilenkov, senior economist at Troika Dialog, specified that 2004 was crucial for Russia’s economic advance. Though the annual results don't look bad, a definite trend for slowdown has emerged starting from the second half of the last year. It was brought in by the crisis of power confidence accompanied by decline in investments and failure to meet inflation target of the government. In the second half of the year investors understood that the government has claims not against certain people but against business and property re-distribution, Gavrilenkov said. Such opinion is completely shared by Yevgeny Yasin, economist, scientific advisor at the Higher School of Economy University
According to Belousov, “the growth rates in the second half go down each year” and it is hard to draw well-defined conclusions based on preliminary data. Klepach agreed the confidence crisis adversely affected the economy, but “the declining trend couldn’t be explained solely by it.” “The economy objectively reached a boundary where it needs restructuring,” Klepach said. At present the Economic Development Ministry is making out a 2005-2008 program targeted at “economy transition on innovative railing.” But exactly this program has been already called an illusion. It is nothing else but “a political order of the authorities for check-box… The chance that this program may be implemented will emerge only in the event that those who have written it [Economic Development and Trade Ministry] will execute it. And they have no such chance,” said Sergey Aleksashenko, former first deputy head of the CBR and today’s director of the Development Center.
The experts don’t believe an economic breakthrough may occur. 2005 economic growth is estimated to shed around 1 percent; inflation may vary between 9 percent and 15 percent. Analysts of Russian Academy of Science forecast the GDP growth of no more than 3.5 percent – 4.5 percent for the following two years.
www.kommersant.com
All the Article in Russian as of Jan. 28, 2005
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