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Wednesday, March 14, 2018

Siluanov did not give Obama to destroy the Russian economy

Finance Minister Anton Siluanov has put the “fat” cross in the sanctions policy of the West. In interview to the program “Vesti on Saturday” he said that the United States failed to “break our economy.” The failure of this policy say multiple indicators: decrease in the rate of inflation, capital flight, stabilization of the ruble, growth of profit of the enterprises of not raw branches, and the main thing – the resumption of economic growth later this year. However, with such a rosy assessment of prospects for domestic GDP is not agreed upon by many independent experts.

photo: Alexander Astafyev

Not long ago, President Barack Obama boasted that the policies of Western financial sanctions against Russia imposed in 2014 due to the return of the Crimea and war on Donbass, “ripped to shreds the Russian economy”. At first glance, he was not so wrong. Last year, our economy fell by 3.7%, the ruble after some strengthening in the spring of last year, once again rushed down. But who is more guilty?

Does not Washington. It’s all in the collapse of oil prices. Of course, someone in the “White house” may all the success to himself. The lower oil prices, the faster decrease fuel prices. Im overseas right, but we have still more expensive gasoline. It’s all in the excise tax, which this year has increased twice already.

But this is not enough. But our economy is in any case will stay at current oil prices.

The ruble will remain stable in the next three years while maintaining average annual oil prices near $40 a barrel, Siluanov said. According to the Minister, the exchange rate came into equilibrium with the oil prices and in the case that balance will be preserved and the orientation of the Ministry of Finance on the price of a barrel is correct, the ruble will be to maintain stability.

Siluanov also said that the Russian economy as a whole to adapt to new conditions, and maybe by the end of the year to reach positive growth. According to him, the economy with a high level of value added at last began to dominate the export-oriented resource industries.

“The profit at the end of last year, profits rose more than 20% – this has not happened in recent years”, – concluded the Minister.

It remains to answer the question, why is it that we will start investment growth? While all the experts range: investment in the economy are falling – as they are not effective. And all suggestions to fix the situation are useless.

However, Siluanov said that in the first half of the year the authorities will decide on the extension of the support of a number of sectors of the economy depending on whether the received additional incomes of the budget. “On the primary part of the funds are missing. In the second part we were counting on the additional revenue. If additional revenues will be visible in the first half — of course, we will be able to consider the possibility of expanding those measures support, crisis support, so-called, for industries, for certain categories of expenditure”,— said the Minister. However, the Finance Minister warned that for the implementation of priority actions from the plan to support the economy in 2016 need more than 100 billion rubles.

But it’s not the size of the investment. And their accurate addressing. The economic situation in the countries of Eastern Europe this year will be markedly better than in the past, according to the latest forecast of the European Bank for reconstruction and development (EBRD). In Russia the recession may be replaced by growth in 2017, but in the medium term the main risk for the Russian economy will not low oil prices, and slow progress of reforms and lack of investment.

In this regard, according to Anton Siluanov, the Western sanctions turned out for the foreign business loss of revenue, as investments in Russia have always been profitable and reliable”. “The effects that our counterparts abroad were expecting to achieve from the imposition of sanctions they have not worked. And worked in the first place, probably to a greater extent even that of local, Western entrepreneurs have lost part of their income, revenue from the “reinvestirovanie” in Russia. Investments in Russia have always been profitable and reliable”,— underlined the Minister of Finance. According to him, currently, inflation in Russia has stabilized, foreign exchange reserves are rising, capital outflows dropped sharply.

However, independent experts of “MK” I guess it is not so simple. Continue to fall, real incomes, then the demand, and this is the main part of GDP growth. Capital outflows declined, but not disappeared forever.

But more importantly – continue to disappear investment. It seems to be growing profits, but in fact the latter will not want to invest. What’s the matter? There is no certainty in real income.

And this is the most significant. Russian industry by the day demonstrates its backwardness from the West. Especially promising technologies, which have been banned by Washington and Brussels two years ago. Nobody will give us a modern development. What a few years can lead to dire consequences.

And even the increase in oil prices in the next two to three years will not lead to real economic growth.

The way out is always there. Cheap credit in the first place. But the main thing is to interest the investors. Including foreign.

The Finance Minister admitted that this may contribute to the reduction or elimination of capital outflows in the near future and the preservation for a long period of “saving behavior” of the population. As a result, according to Bank of Russia estimates, inflation will reach 5% in April 2017, the target level of 4% at the end of 2017.

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