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Russia’s GDP growth in 2017 may be two times above formal outlook

Inflation in Russia may amount to 5.5% in 2016, in particular thanks to a good harvest, the Russian finance minister has added

MOSCOW, December 28. /TASS/. Russia’s GDP growth in 2017 may be twice higher than officially projected 0.6%, Finance Minister Anton Siluanov said on Wednesday in an interview with Rossiya 24 TV Channel.

"Growth rates of the Russian economy are not lower than world’s ones. GDP growth rate in our forecast is 0.6% in 2017. We believe this figure may be almost twice higher - about 1-1.2%, fairly feasible rates of economic growth," Siluanov said. 

"If it were not for the decision to repay debts on the loans the enterprises of the defense complex has taken, we would have over-fulfilled the objective [on budget deficit of 3% of GDP - TASS]. If it was not for the recent decision on the amendments to the law on the budget obliging us to repay all outstanding loans of the defense sector enterprises [about 800 billion rubles of additional funds were spent on it] the deficit would have been 2.7% of GDP," the finance minister explained.

At the same time the finance minister said that the growth of Russia's GDP in 2017 may be twice as high as the official forecast of 0.6%.

Inflation in Russia may amount to 5.5% in 2016, in particular thanks to a good harvest:

"This year we see that the harvest is good and we see that this factor has affected the decline in prices on consumption market. Good harvest is one the key reasons that the anticipated inflation will be 5.5% not 5.8%," the minister has noted. 

On currency rates and oil prices 

Additional ruble rate fluctuations even to the upside are not needed for the Russian economy that adapted to the current rate, Siluanov stated:

"Further strengthening will lead to declining competitiveness for our industry, which is already accustomed to the rate of 65 rubles per dollar. I think any further rate fluctuations, even to the upside for the ruble, are not needed now." 

No serious ruble rate fluctuations are expected in the next year, the Minister said. "We do not expect any serious changes and fluctuations of our currency, since no dramatic changes of the US Federal Reserve rates are projected in current forecasts," Siluanov said.

The oil price of $45 per barrel is equilibrium, the minister added.

"$45 per barrel is a structural, equilibrium price that will balance demand and offer on the global oil market. This is the price ensuring stability in honoring commitments, including social ones, in any situation changes," he said.