NOVO OGAREVO, February 12. /ITAR-TASS/. President Vladimir Putin said hydrocarbons could no longer serve as a driving force of economic growth in Russia.
According to the Finance Ministry, oil and gas revenues account for almost 50% of budget income in Russia. Economists have been urging the Russian authorities over the past several years to reduce dependence on oil and gas export and increase the share of non-hydrocarbon revenues.
At a meeting with members of the government on Wednesday, February 12, Putin asked Minister of Economic Development Alexei Ulyukayev to report on the progress in preparing a long-term macroeconomic forecast, including reserves for economic development.
“We have discussed this many times, I mean the situation in the global and national economy, and there is no point in repeating our common opinion that although the previous sources of growth may not be completely exhausted, they certainly are not as effective as before,” Putin said. “We always expected growth and more growth, and higher and higher energy prices, which are staying at a relatively good level, but they can no longer produce the kind of growth we saw before.”
Central Bank Chair Elvira Nabiullina said in late January that “the previous economic model based on the constant growth of oil prices has exhausted itself, and a new economic model based on private investments in competitive industries should be put in place.”
“Oil revenues were invested in the economy, industry and construction. Oil prices are high now, but they do not grow all the time. Therefore the model should be changed,” Nabiullina said.
She believes that a new model should bring investments into competitive non-resource industries, she said, adding that “this money will start paying off in three to five years.” Until then, economic growth rates will stay low, she cautioned.
Putin asked Ulyukayev to present his vision of sources for economic growth and evaluate the work to draft measures to improve labor productivity and solve the problem of company towns and closed administrative-territorial entities. The president said the latter was a matter of special concern because of security restrictions.
According to preliminary projections made by the Ministry of Economic Development, Russia’s GDP in 2013 grew by 1.2% and is expected to grow by 2.5% this year. The federal budget deficit in 2013 was 310.52 billion rubles (0.5% of GDP) and is expected to be 0.6-0.7% of GDP in 2014.