The Finance Ministry has predicted 15 years of stagnation in the absence of reforms


In the absence of reforms Russia will have a prolonged period of stagnation. About it writes on Monday, the newspaper “Vedomosti”, which familiarized with the basic parameters of the forecast of the Ministry of Finance regarding the development of the Russian economy on the period until 2030.

This is the so-called inertial scenario. According to him, the price of oil until 2030 remains at $40 per barrel in real terms (in nominal increases of about $1 per year). The Finance Ministry expects that in 2016 the economy will shrink another 0.8%, and in 2017 will resume growth, but after this period, the economy will grow by only 1-1,3% a year. On average, according to the inertial forecast, 2014-2030 the average annual economic growth in Russia will amount to 0.8%.

The price of oil in nominal terms, according to the inertial forecast to exceed $50 per barrel only in 2028. Oil production will stop growing in 2016 and will reduce its exports to stagnate, predicts the Ministry of Finance.

The representative of the Ministry of Finance clarified to the publication that this scenario, which represents the internal calculations of the Ministry, does not include structural reforms. According to him, he is not the main. “There are others that we consider more correct for Russia and which involved the implementation of reforms,” the newspaper quoted his companion.

The representative of the Ministry recognizes that if nothing is done, including the structure of the budget, a scenario of secular stagnation can be realized. However, it is hoped, the most likely other target — scenario of the Ministry of Finance, which will allow the economy to reach a growth rate of 2-3%.

He explained that this goal can be achieved will be partly due to more expensive oil — $50 per barrel in real terms for the entire period. However, the key condition he names structural changes in the economy. As an example, he cites an increased return on capital through productivity growth outstripping wage growth, and, as a result, the increase in the share of investment in GDP. This maneuver requires greater flexibility of labour market, mobility of workers, investment in their retraining, he said.

Last Sunday the Minister of economic development Alexey Ulyukaev in interview to “the First channel” declared that “more realistic scenario” of his Ministry the price of oil in 2016 will be $40 per barrel. Current oil prices of $30 per barrel he called “extremely low”.