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Sunday, July 16, 2017

The IMF’s improved forecasts for the Russian economy

The situation in the Russian economy remains challenging, but the international monetary Fund (IMF), not to mention domestic experts spoke about a noticeable improvement. Thus, the IMF reduced the estimated magnitude of the decline in the Russian economy this year from 1.8% to 1.5%, and in 2017 predicts growth, and not 0.8% and 1%. Meanwhile, according to the realistic variant of the forecast, minekonrazvitiya, the average oil price will amount to $ 40 per barrel, and economic growth this year will reach up to 0.2%. In other words, Russia, like, moved up the stairs, leading down. Whether so it?

photo: pixabay.com

The IMF would not be Mwfm, if somewhat improved Outlook on the economy for the current and following years, was not warned about the subsequent slow growth in the absence of significant structural reforms. However, the new forecast predicts a decline of the Russian economy in 2016 is only 1.5% against the previous 1.8 per cent. And in 2017 “the light of the projected stabilization of oil prices and easing domestic financial conditions, it is expected that economic growth will resume and will be approximately 1%”, – reads the statement of the Fund. (Previous IMF forecast for 2017 was provided for the growth of the Russian GDP is only 0.8%).

However, prospects for the medium term, the statement of the International monetary Fund, “remained vulnerable due to low forecasts of oil prices, demographic pressures, combined with lingering structural problems, as well as the impact of sanctions on the performance and investments. In the absence of major structural reforms the long-term growth will be probably about 1.5%”.

In other words, while the fall continues, but there is a substantial slowdown. And by the end of the year, despite the predictions of the US of a “gap” in our economy, the decline will cease altogether, and we will see a slight increase. Where did this positive trend and how it is sustainable?

Unfortunately, excessive optimism in this matter is misplaced, assured “MK” Professor, National research University – Higher school of Economics Igor Nikolaev:

– All positive as in the predictions of the IMF and local economists, appeared solely because of the improvement in recent indicators for the domestic industry. According to the logic of these experts, it became better now, and the forecast for the future was better. Meanwhile, a reliable forecast for at least a year it is necessary to consider the factors that will proceed. And they are not very encouraging.

The three main causes of the crisis of the Russian economy are: the lack of structural reforms, falling oil prices and anti-sanctions. In that sense it happening now? Structural changes had been made, and serious structural imbalances continue to exist; the sanctions are not lifted; and the price of oil, though have grown, but only slightly. Is it possible in this situation to speak about the steady tendency of growth? Well, where does it come from?

To change seriously, you must eliminate all three of these reasons. I want to emphasize: structural reform, though necessary but not sufficient! Growth will come only when the sanctions are lifted. The tactic of “Juche” or self-reliance over a long period, as we saw, for example, in Cuba, the country allows only to survive, but not develop!

Sanctions . Chronicle of events

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