TASS. The pace of GDP growth in Russia could gather momentum to 5% per year if economic reforms get off the ground, Presidential Commissioner for Entrepreneurs' Rights Boris Titov said in a TASS interview.
When answering a question whether or not MED's economic growth forecast of 2% in 2017 is real, Titov claimed that "the rate of growth may be much higher, but only if the economy goes through a real makeover. If the Growth Strategy is implemented, the Russian economy will be growing 5% per year. If we drag our feet with reforms, the economy will face stagnation, or maybe it will grow if oil brings some luck, or it will take a deeper drop if oil market conditions turn out to be unfavorable," Titov thinks.
According to him, government officials now have reason for optimism only because oil futures stabilized not at the lowest level. "By the way, why did inflation slow down? Because oil has gone up. The inflation rate in Russia depends not on the cash flow in the economy, but on the performance of the ruble, i.e. on prices for imported goods. Overall, the economy is still in stagnation, still dependent on commodity exports. There's no growth at all in the SME segment," Titov pointed out.
In line with MED's new forecast, the nation's GDP would grow 2% in 2017 if the ruble trades at the annual average rate of Rub 64.40 per dollar against an earlier forecast Rub 67.50 per dollar. Inflation would reach the 4% objective as early as May, slowing down to 3.8% by end of year.
As for average oil prices, MED finally admitted that they will be higher than an expected $40 per barrel over the next three years. The annual average price of oil in both scenarios – baseline and target – would be $45.60/bbl in 2017, and in 2018, 2019 and 2020 it would stand at $40.80/bbl, $41.60/bbl and $42.40/bbl, respectively.
