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Russian economy to retain stable growth rate till 2030 – economics ministry

On the whole the scenario is characterized by a greater investment vector of economic growth and Russia’s firmer foothold in the world economy

MOSCOW, January 30 (Itar-Tass) –The Russian economy will remain stable up to 2030, but it will be growing by no more than four percent a year, as follows from the Economic Development Ministry’s long-term social and economic development forecast.

Such an option, according to the document, will be possible in case of the innovation- based scenario. Growth will be stable. It will reduce from four percent a year (in 2015) to 3.8 percent by 2026-2030, and investment growth will be gradually reducing from 7.3 percent to 4.8 percent by 2025-2030.

On the whole the scenario is characterized by a greater investment vector of economic growth and Russia’s firmer foothold in the world economy. It relies on the creation of advanced transport infrastructures and a competitive sector of high-tech industries and an economy of knowledge alongside the upgrading of the energy and raw materials extraction complex.

The scenario, according to the document, envisages conversion of the innovative factors into a leading engine of economic growth and a breakthrough towards raising the effectiveness of human resources in 2020-2022, which would make it possible to improve the social parameters of development. Private and public spending on the health service will grow from 4.6 percent of the GDP in 2010 to 7.1 percent of the GDP in 2030 respectively, and on education, from 5.2 percent to 7 percent of the GDP respectively.

The average growth rate of the Russian economy is estimated at 4.1 percent in 2013-2030, the effects of likely crisis shocks in the world economy excluded.

The basic scenario predicts a moderate growth in the prices of crude oil and other resources – by about one percent a year in real terms in 2016-2018. The price of the Urals blend in 2020 will be at 116 dollars per barrel, and in 2030, at 164 dollars per barrel. In real terms the price of oil in 2013-2030 will stay within a range of 90-110 dollars per barrel in 2010 prices.

The price of gas exported to non-CIS countries in real terms is estimated at 340 dollars per one thousand cubic meters, which is above the 2010-2011 level.

The Russian economy will be able to achieve and exceed the five-percent level Prime Minister Dmitry Medvedev has identified only after 2016, and on the condition the country will opt for an accelerated development scenario and eases the budget rule.

The targeted, accelerated growth scenario also envisages the solution of issues the president outlined in his decrees last May for creating and upgrading 25 million high efficiency jobs by 2020, increasing the volume of investments to no less than 25 percent of the GDP by 2015 and to 27 percent by 2018, increasing the share of high-tech and research-intense products in the GDP by 1.3 times in 2018 against the 2011 level, and raising the labor productivity by 2018 by 1.5 times and the level of real wages by 1.6-1.7 times by 2018.

The GDP average growth rates under that option are to go up to 5.4 percent, and Russia’s share in the world economy is to increase to 5.3 percent of the world GDP.

The Economic Development Ministry has also drafted a conservative scenario, which is characterized by moderate economic growth rates (no more than 3.2 percent) on the basis of active modernization of the fuel and energy and raw materials sectors of the Russian economy, while a certain lagging behind of the civil high-tech and medium-tech sectors will remain. Under that scenario the economic growth rate will be declining from 3.7 percent in the period ending in 2015 to 2.5 percent by 2026-2030, while investment growth will fall from 7 percent to 3.6 percent respectively.

The Russian economy by 2030 will grow only 100 percent, the real incomes of the population will double, and Russia’s share in the world GDP will reduce from 3.8 percent in 2012 to 3.6 percent in 2030.