LONDON, January 24 (Itar-Tass) – Russia has developed a tendency towards the reduction of the capital outflow, which has a positive effect on the country’s economic performance, Chief Economist of the European Bank for Reconstruction and Development (EBRD) Eric Berglof said on Monday at a press conference at the headquarters of the financial institution, which is located in London.
Capital flight from Russia has significantly decreased, which is a positive sign, said Berglof. He explained that this trend is linked with the adoption of measures for the transition to the new currency regime and curbing inflation. These figures are encouraging, but Russia still has difficulty in attracting direct foreign investment, said the EBRD chief economist. He also pointed out that the debate continues about whether the data of a significant outflow of capital from Russia in recent years are true and how exactly this indicator should be properly measured.
Among the positive factors for the Russian economy Berglof named beneficial effects of the integration associations, involving also Kazakhstan and Belarus, including the Customs Union and the Common Economic Space. The reduction of barriers to trade has a positive effect not only on Russia, Kazakhstan and Belarus, but also for the region as a whole, the EBRD chief economist told Itar-Tass. And Russia is the country that got most of the benefits.
According to the EBRD forecast, the growth of Russian GDP in the current year will be 3.5 percent. The annual rate of inflation in Russia, according to the bank experts, in December 2012 grew to 6.6 percent due to fluctuations in food prices and growth of tariffs. In May, the same figure was a record low - 3.6 percent.
According to the bank’s review, Russia’s economic growth will largely depend on the price of raw materials, primarily oil and natural gas, which account for almost 70 percent of exports and about half of the revenues of the state budget. According to the bank experts, the Russian government has “recognised the need” to accelerate economic diversification to reduce macroeconomic risks.
“The country’s growth outlook, however, remains highly dependent on global commodity price developments, given its continued strong dependence on natural resources (particularly oil and gas, which now account for nearly 70 percent of total merchandise exports and for around one half of government revenues). The government has recognised the need to reduce macroeconomic volatility by speeding up economic diversification, which in turn requires significantly improving the continued weak business environment, addressing skills gaps at the regional level, and leveraging Russia’s enormous regional diversity,” according to the EBRD chief economist’s overview.
The EBRD, the shareholders of which are the governments of 64 countries, as well as the European Union and the European Investment Bank, was established in 1991 to assist the countries of Eastern Europe and the former Soviet Union in the transition from a planned to a market economy. Currently, the EBRD invests in dozens of countries in Central and Eastern Europe, Central Asia, the Southern and Eastern Mediterranean. According to forecasts of the financial institution, in the current year, the average GDP growth in the countries where bank conducts operations will be 3.1 percent.