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Ulyukaev: There is no recession in Russian economy

August 12, 2013, 8:00 UTC+3
"Stagnation is probably an appropriate term," head of the Ministry of Economic Development said
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MOSCOW, August 12 (Itar-Tass) - There is no and will not be any recession in the Russian economy, Alexei Ulyukayev, head of the Ministry of Economic Development (MED), told Kommersant in an interview published on Monday.

"Stagnation is probably an appropriate term," he added when answering a question how MED estimates the present state of the economy: as an emergent recession or as stagnation.

Ulyukayev explained why recession in the economy of the Russian Federation is impossible: "There is consumer demand and there is export. Russia's net export cannot serve as a powerful driver of economic growth any longer but it is quite able to ensure a low but positive growth rate for many years ahead," the Minister pointed out. "Our structural and social matrix can keep a growth rate at about 3%. This is approximately a global average expected rate of growth".

At the same time Ulyukayev said MED would "reconsider the forecast for the forthcoming three-year budget period and the long-term forecast in preparation of a budgetary strategy for a period until 2030".

"In all these documents we are sure to make a more conservative estimate of future rate of economic growth. The estimate will also take into account the prospects for global growth, and our competitiveness," Ulyukayev emphasized.

As to which topics will be prioritized in the Ministry's activities in the coming months, Ulyukayev said, that they will discuss first of all the tariff policy, which currently doesn’t take into account the business cycle in Russia. Ulyukayev believes that it must be long-term but flexible at the same time.

The second priority area, he said, is "to diversify the economy and everything that concerns support for non-resource export".

"Primary-resources export – according to the logic of prices on commodity markets and physical amounts - will not be able to uphold economic growth," the Minister pointed out. "We have not so much room for inventing such mechanisms available but we currently have the powerful instruments of the World Trade Organization which must allow this country to settle problems of non-resource export".

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