FBK Economic Club Expert Forecast for 2015
Igor Nikolaev, the FBK Institute of Strategic Analysis director, presented a detailed analysis of the domestic economic trends for the past year. He pointed out to the growth of industrial production, trade and real wages in comparison with the past year. At the same time Nikolaev drew attention to the fact that the majority of macroeconomic figures demonstrated negative dynamics. Specifically, the decrease of agricultural production, export and import; the reduced investments in the fixed capital.
According to the economist, some of the trends are of a long-term nature, for example, Russia GDP has declined at an annual rate of 1-2% since 2010, and the current situation in the world economy, the cut in oil prices and stronger dollar make the slide more dramatic.
Analyzing the Russian economy risks and capacities Igor Nikolaev noted that besides the situation in the oil market there were some negative factors, such as the accelerating inflation, growth of the tax burden for businesses and significant outflow of capital from the country.
“The crisis is self-developing, it is affected not only by the economic factors, but also by the geopolitical tension, the sanctions and anti-sanctions,” he explained.
However, according to the expert, a number of industrial sectors, in particular, the military-industrial complex, agriculture and food industry, pharmaceutics and some of the construction industry sectors have fairly good prospects.
“The forecast of the Institute of Strategic Analysis for 2015 is as follows: the cut of GDP by 2-4%, the inflation at an annual rate of 12-14%, the average annual rouble/;dollar exchange rate will amount to 70 roubles, industrial production will drop by 4-6%, investments in the fixed capital will drop by 8-10%”, thinks the expert.
Summarizing, Igor Nikolaev noted that to overcome the basic risks over medium-term period of time would not be feasible, and the social and economic situation worsening would continue.
“The Russian economy is immersing into a crisis that might not be,” he added.
“Russian economy: an optional crisis” report of the FBK Institute of Strategic Analysis
Sergey Vorobiev, Ward Howell President, Co-chair of Club 2015, reminded the audience about the tree basic scenarios of economic development for Russia worded by the Club 2015 group of experts. “To our regret the negative scenario is realized. Under the circumstances the only way out for the economics is to increase the labor efficiency, structural reforms with the view to return to the trend of catching-up development”.
Oleg Zamulin, RI HSE professor, dwelt on the specifics of the monetary policy in the crisis periods. In particular, the expert pointed out to the differences between the current crisis and that of 1998.
“We should not succumb to the illusion that it is possible now to recover the economy as quickly as late in the 90ies. At that time we had sufficient resources that were unclaimed, in particular, the unused production capacities created in the Soviet Union and qualified personnel. Now the economic surge is only possible with the introduction of new technologies and improved productivity. The main obstacles for that are the reduction of investments in the fixed capital and drop in the investment activity,” noted Oleg Zamulin.
Vladimir Sokolin, chairman of the CIS Interstate Statistics Committee, agreed with his colleagues about the need of investments. He said, he did not personally know any cases of economic growth without any influx of investments. At the same time, according to the expert, the CIS three largest economies: Russia, Belorussia and Ukraine – systematically felt the lack of investment resources for a number of years.
Nikita Maslennikov, the Institute of Contemporary Development advisor, made a final speech.
In his opinion, the Russian economy is simultaneously affected by several factors of crisis, specifically, the cyclic (market) are combined with the structural. In that situation, according to the expert, it is very important for the Bank of Russia to pursue coordinated economic policy in concordance with the Government Economic Block. However, that is not always the case in the current situation, which reduces the effectiveness of measures.
FBK Economic Club is a unique discussion platform enabling the representatives of mass media to meet with the known economists, politicians, and officials for professional discussion of a range of economic issues. Within the framework of the Club presentations are held of FBK analytical reports.