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Russia’s Finance Ministry predicts zero GDP growth in 2014

April 15, 2014, 14:17 UTC+3
Russian Finance Minister Anton Siluanov said GDP growth value was currently estimates at 0.5% at the most
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Russian Finance Minister Anton Siluanov

Russian Finance Minister Anton Siluanov

© ITAR-TASS/Alexei Nikolsky

MOSCOW, April 15. /ITAR-TASS/. Russian Finance Minister Anton Siluanov sees very slim chances of GDP growth this year. Siluanov told the Finance Ministry’s board on Tuesday that GDP growth value was currently estimated at 0.5% at the most. “Most probably, it will be rather close to about zero.”

Last year’s federal budget was executed in the context of a considerable revision of the economic development forecast. At the beginning of this year, the GDP growth was estimated at 3.6%, but in reality it measured 1.3%.

“But for the oil and gas revenues, the federal budget deficit last year might have been not 0.5% of the GDP, but as big as 2-3%. Had we entered the current period of geopolitical instability with such a deficit, the situation in the financial markets would have been developing quite differently,” Siluanov said.

The finance minister shared his worries over Russia’s dependence on incomes that were tightly pegged to incomes from volatile, vulnerable sources. He recalled that over the past years the level of non-oil and gas deficit had never fallen below 10% of the GDP, which was the evidence of high budget balance risks.

Speaking about the outflow of capital from the Russian economy, Siluanov described it as the main cause of “uncertainties over the geopolitical situation’s further development.” He estimated January-March capital flight at $50 billion.


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