The Russian economy will not be able to reach 5 percent growth or higher in the coming years, Deputy Economic Development Minister Andrei Klepach said while presenting at a roundtable organized by the newspaper Vedomosti entitled 'Growth of 5 percent or More: What is Preventing Russia from an Economic Breakthrough' in Moscow on Friday.
"The question of 5 percent growth is not a question of this year or even, it seems, for the next several years, if there are no surges for the better in foreign market conditions, and that's unlikely," he said.
For this reason, there is no possibility "to jump to 5 percent growth or even more," Klepach said. He attributed this to the fact that the post-crisis recovery model has exhausted itself. The recovery process is complete in all spheres besides the investment sphere, where it has "not yet fully" wrapped up, he said.
"That means development models or development factors need to be reconfigured, and the process of reconfiguration itself is not that simple," Klepach said.
The slowdown in growth seen at the beginning of this year was caused by a stagnation in exports, mostly of oil and gas.
"We expect there to be somewhat of a resumption in growth of oil and gas exports in the future, but it won't be as powerful as before the crisis either in terms of price or volume," Klepach said.
The second issue is that both the model of lending to the population and the population's behavior are going to undergo significant changes.
"This change hasn't yet fully revealed itself, and the rates of growth in retail lending are still keeping at a high level, but there is a declining trend, and it will continue further," Klepach said.
"That said, it's apparent that the behavior of the population is changing. Even though we anticipated a slowdown in retail trade, now it is moving at a higher speed than we had forecast. It seems that the population is starting to save more, more is being invested in mortgages. So we're transitioning to a stage at which the rates of retail trade will fall more significantly than they did at the recovery stage after the crisis, and even more than they grew prior to the crisis," Klepach said.
The third contributor to the deceleration in economic growth is the collapse of investments in fixed capital. However, the monthly investment data are not completely reliable, and the Federal State Statistics Service (Rosstat) even wanted to refrain from publishing it. In the end, though, it decided to leave the data as an indicator of sorts.
"In all likelihood, there is a serious slowdown in investments, but if we take into account the change of the seasonal wave, there is still a positive dynamic, and we expect an acceleration in the growth of investments, but we will only find out by the end of the year," Klepach said.
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