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MOSCOW, December 27. /ITAR-TASS World Service/. “In 2013, the Russian economy growth almost stopped,” the Vedomosti newspaper writes. According to the Economic Development Ministry, economy grew by a mere 1.3%, compared to the first 11 months of last year.
It was officially acknowledged by the end of the year: stagnation is caused not only by external factors. Developed economies’ growth acceleration in the second half of the year did not affect in any way the Russian economy dynamics, says Natalya Orlova of Alfa-Bank. Following the Economic Development Ministry, that had four times downgraded the forecast this year, the wave of overestimation of the economic growth potential - the second after the 2008 crisis - also swept the market, Orlova writes.
Private consumption, maintained by wage increase for the state employees and extending of credits remains the only source of economic growth. However, in 2014 the consumption growth rate would slow down, the newspaper stresses.
Investment slump has happened above all because of the state that has completed large-scale construction projects, and state companies, that completed major investment projects — so it coincided in 2013. “The bad news is that private investment also started to decrease in the middle of the year,” Vedomosti quotes Dmitry Belousov of the Center for Macroeconomic Analysis and Short-Term Forecasting.
Despite the reduction in demand for loans among enterprises, the resources are still costly, making banks provide loans to households, Belousov says: “The Central Bank responds to this with utmost straightforwardness - clamping down on everything at once.” The Central Bank’s aggressive policy of purging the banking system may also cost the economy dear - due to the wave of revocation of licenses, which has for the first time affected banks from the country’s top 100, a certain panic is already rising in the sector.
The crisis has already begun, Belousov believes: “We have found that growth of one or two percent means a real crisis for us, with sequestration of the regional budget expenditures.” The Finance Ministry is faced with revenue shortfall, using the oil and gas revenues — 900 billion rubles that were to be transferred to the reserve fund, to fill all the gaps. The regions have fallen short of another one trillion rubles: the return of profit tax has fallen by 15%, instead of the planned growth of 12-15%.
“We need a more serious approach to both macroeconomic and budget planning: we should not daydream and rely on the forecast, which is based on certain wishes and plans for development,” Finance Minister Anton Siluanov believes. Nevertheless, the regional budgets for 2014 have again been made up based on the assumption that profit tax revenue would be 15 percent, and the federal budget based on the economic growth of three percent (Economic Development Ministry has downgraded the forecast to 2.5%) and the price of oil of $101 per barrel. Siluanov believes that the latter is the main risk.
Since 2012, oil proceeds have been ensuring 50% of the total revenue. Due to such a strong dependence on oil, the authorities have to look for additional sources of financing, and changes in the pension system are its direct result, says Orlova.
An uneventful period has begun, which also has psychological reasons, believes Director of the Institute of Economics of the Russian Academy of Sciences (RAS) Ruslan Grinberg: “Our government has been expecting all the time the private sector to make a leap. But in fact, we observe the total bureaucratic oppression of the business. People do not want to make long-term plans because the state greatly interferes in their assets.”
Russia has a huge chance, research supervisor at the Higher School of Economics (HSE) Yevgeny Yasin is certain: “But we will not move anywhere unless serious reforms are undertaken, and not in the economy, but in the political and legal spheres.
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