FBK Economic Club Experts Take a Look Back at 2017


Looking back at the departing year, FBK Economic Club Experts discussed the economy of the presidential elections and the country's economy after the elections, oil prices and the future of the rouble, GDP and real disposable income.

In his opening speech Igor Nikolaev, Director of FBK Strategic Analysis Institute, said that there was an increase in many macroeconomic indicators at the year-end, however, in each case such increase had certain negative aspects. For example, economic growth amounted to 1.5-2% according to different estimates while the forecast was 0.6 %. However, real disposable income is still falling and has decreased by 11% for the last four years. “Inflation is 2.5 % (compared to the expected 4%) but there is no increase in investments. For example, in 2007 inflation was 12% but investments in fixed assets reached 3%,” Igor Nikolaev said.

Alexey Vedev, Director of the Center for Structural Studies of the Russian Presidential Academy of National Economy and Public Administration, says that this year the Ministry of Economic Development and the Central Bank has overestimated the growth rate. He estimated this year’s actual economic growth at 1.5-1.6% at most. I do not see any drivers for further growth. Investment activity is at a low level, so is trade activity, and they have no reasons to grow. And all the factors which have caused growth this year will be exhausted next year. On the bright side, inflation will be low and the rouble will be stable, Alexey Vedev concluded.

Andrey Movchan, Director of the Economic Policy Program at the Carnegie Moscow Center, says that modern Russia has two distinct identities, namely an oil corporation and a social block. In the social sphere GDP has been falling for the last five years by 1.5-2% per year and oil prices do not affect that at all. Russia has become a country of permanent recession. A country with decreasing income and vanishing household savings where investments are not sufficient to resume growth. In addition, there are no economic programmes and the government relies only on the increase in oil prices, Andrey Movchan underlined.

Oleg Vyugin, Chairman of the Board of Directors at SAFMAR Financial Investments, agrees that there is no actual economic growth, though there is no recession comparable to 2015-2016 either. There are just neither the resources, nor the incentives for the growth. The public sector has resources but uses them extremely inefficiently. In addition, the motivation for the economic growth is very low in the public sector as the competition is not in labour productivity but in relationships with the government which affect distribution of resources. And few resources left to the private business are not sufficient for the economic growth though supplemented by rather good motivation.

Nikita Maslennikov, Advisor at the Institute of Contemporary Development, thinks that Russia is going through a classic structural crisis. And the economic growth is rather nominal. This is evidenced by the instability of macroeconomic indicators. According to Nikita Maslennikov, the annual growth of 1.5-2% is the limit which Russia has reached in the current economic model. However, in order for the government to perform its social responsibilities the annual growth should be at least 3.5%, he said.

FBK Economic Club is a unique discussion platform where journalists can meet well-known economists, politicians and public officials in order to discuss a wide variety of economic issues. Analytical reports prepared by FBK are also presented in the Club.


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