Russia's government says about stagnation and weakening ruble
8:42, — Economics
Russia's Economic Development Ministry complains about economy's dependence on external factors.
The statement was made by deputy minister Andrei Klepach. He earlier forecast the end of stagnation in the second or third quarter of 2014, but he admits now it may take more time if urgent measures are not taken, Novy Region news agency reports.
“According to our estimate, our economy is not in crisis, but there is stagnation. If earlier we expected the stagnation to end in the first quarter or by the middle of the year, there are risks now that it may continue if no measures are taken,” Klepach said.
According to the deputy minister of economic development, the current situation is slightly better than in pre-crisis 2008, but economy still greatly depends on external factors, as the events in Ukraine followed by the deterioration in relations with the West showed.
“The debt of the corporate and banking sector as a percentage to GDP in lower than in 2008, and the currency position is better. It means we are better prepared for exchange fluctuations and other troubles. But we see a high dependence of our economy – both the GDP growth and the corporate and banking sector – not only on the world oil prices, but also on the situation related to capital outflow,” Klepach said at a conference at the Higher School of Economics.
The deputy minister also noticed positive signs in the exchange rate fluctuations. The weakening ruble may bring additional 800-900 billion rubles to the Russian budget, according to him. The ruble weakening will lead a higher inflation rate and a decrease in domestic demand.
“We lose the growth rate in the short term, but we will receive an additional budget resource, which is not sterlised by the budget rule. The changes in the exchange rate actually give us, according to different estimates and taking into account different hypotheses, additional 800, almost 900 billion rubles to the federal budget this year. The worse it goes for the exchange rate, the better it is for the budget, but it doesn't mean it is better for the whole economy,” Klepach said.
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