The Russian economy has reached its potential, according to the World Bank. The country faces prolonged stagnation or even recession, if the authorities do not start structural reforms and increase productivity.
The World Bank on Wednesday presented three options for the development of the domestic economy. Pessimistic involves geopolitical tensions increase, resulting in the country come a long recession. In comparison with 2014 the year when growth is expected to economists, is 0.5% (the same as the official forecast), the economy will shrink by 0.9% in 2015 and 0.4% in 2016.
However, the baseline scenario assumes that GDP will still grow next year, but growth will be minimal – 0.3 and 0.4% in 2015 and 2016. The economy may accelerate to 0.9% in 2015 and 1.3% in 2016, if geopolitical tensions would disappear, and sanctions will be lifted by the end of 2014.
President Barack Obama yesterday did not rule out that lift sanctions in the case of “if Russia will take the path of peace and diplomacy.” Earlier, NATO reported reduction in the number of Russian troops on the territory of Ukraine. This is stated in the reply, the representative organization of Jay Dzhenzena official inquiry agency Reuters.
But the prospects for greater economic growth, World Bank experts attributed largely to the ability of government to solve domestic problems. They are advised to carry out structural reforms and improve competition. It is also proposed to improve the efficiency of public services, such as health and education.
The presence of a dominant market position in inefficient companies prevents an increase in efficiency. “The gas industry remains a state monopoly, which may limit the efficiency and reduce the scale of the exploration and development of new deposits,” – said in a report.
If you do not carry out reforms, the growth can be forgotten – “the economy may , close to achieving maximum level of potential output, “analysts warn. This casts doubt on the authorities’ plans to develop the industry, based on the direct involvement of government in the economy.
In 2013, the IMF experts have warned that the Russian economy is close to its potential level of output, that is, using all human resources and provides full utilization of existing facilities. In October 2012, the director of the Center for Structural Research Gaidar Institute Vedev Alex, now Deputy Minister of Economic Development, said that so far Russia has reached the level of potential GDP.
«We were a little below its potential, but capacity utilization we at a high level, there are also problems associated with the ineffective use of factors of production – says the chief economist of Deutsche bank Yaroslav Lissovolik. – Went by the aging of the population and accumulated problems associated with outdated equipment. Even with a full load of the equipment we have limited the possibility of issuing ».
Russian economists, however, is more optimistic about the capacity of the economy, provided that the government would not carry out structural reforms. “Now our potential output growth is at 2%,” – said RBC chief economist VEB Klepach.
According to him, it is possible to increase your height by “of demand” measures, including through the budget . “Structural reforms are also needed, but in the medium term. We are now, as in 2008, not just lose the pace, but also reduces the potential level of output, narrow the room for maneuver, “- he said.
If it were not for geopolitical shocks, GDP could grow by 0 to 1.5% in the coming years, and with some effort to show 2-2.5%, the director of the Center for Macroeconomic Research Julia Tseplyaeva. Lissovolik assesses the potential growth of the economy during the reform at the level of 3-4%.
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