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Ministry of Economic Development says Russian economy has entered new growth phase

5 April 2017

The data for the first few months of this year indicate that the Russian economy has already entered a new growth phase, but a number of reforms need to be carried out to enhance this growth, Russian Minister of Economic Development Maxim Oreshkin was quoted as saying by Interfax.

“If we look at the numbers from the start of the year – electricity consumption is up by 2%, freight turnover by 4–6%, and today the PMI index was published, which is at its highest level in several years. So we can say that the economy is no longer on the path to growth, but has already entered a new phase of the economic cycle and is actively growing”, Oreshkin said.

The Minister noted that “there will be decent growth this year” without offering any specific forecasts (he previously said in March that Russian GDP could grow by 2% in 2017). As for growth rates in 2018 and beyond, Oreshkin noted that growth trends will depend on the government’s actions, among other things.

“Obviously if we don’t do anything, there won’t be active growth. More sustainable growth can only be achieved through active private investments”, the minister said.

“From this standpoint, we need to create both a stable macroeconomic environment for business as well as microeconomic conditions – regulators, control and oversight, which should also be stable and predictable”, he said. “The second aspect is that the entire economic policy should turn towards the investment process. This refers to the business climate, tax policy, and support for exports”, he said.

The third factor is related to funding, he said. “This objective is associated with the qualitative study of projects, proper distribution of risks, and assistance in supporting projects”, he said. The fourth area is the existence of infrastructure and highly skilled personnel. “If we progress in all four areas, investment will respond to this and growth will follow”, Oreshkin said.

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