Siluanov gave his answer to the question “what to do” with the Russian economy


Despite some improvement in macroeconomic conditions, the situation in the Russian economy remains challenging — the budget deficit is covered by the savings of sovereign wealth funds, and the growth of corporate profits did not lead to an increase in investment activity, warns Finance Minister Anton Siluanov. “The investor taking a decision on the start of a project, always compares the ratio of profits and risks. Obviously, for the growth of investment activity the policy focus should be placed on reducing the risks”, — the Minister wrote in an article published in the newspaper “Vedomosti”. On the website edition of an article entitled “What to do? The Version Of The Ministry Of Finance”. 9 June, “Vedomosti” published an article “What to do? The version of the Ministry of economic development” economic development Minister Alexei Ulyukayev.

According to Siluanov, the authorities need to ensure predictability of economic policy with a clear artificial pre-announced targets and to achieve out to a “balanced” budget. To achieve this it offers not only by reducing government spending, but by raising the quality of tax administration and reducing the share of the shadow economy. This approach, in his opinion, will give the economy the opportunity to access “equilibrium with a stable growth of private investment and resistance to fluctuations in foreign economies”.

In the absence of reforms, the increase in oil revenues in the best case can provide only very weak improvement, said Siluanov. “Rising oil prices are pushing the idea that all normal and no action. Here it is necessary to understand that such an approach in the case of continued growth in oil prices will bring us back into balance, 2013: balance with unstable economic growth and the threat of economic crisis in case of falling oil prices”, — said the head of the Ministry of Finance.

He also warned that favorable for Russia situation in the oil market is not guaranteed. In the short term to a fall in prices can result in increased greatly fallen lately, the supply of oil from Canada, and in the medium — hard landing of China’s economy. In the long run, high oil prices, according to the Minister, to expect and did not have to.

Trends are apparent here: the development of alternative sources of energy, road transport with electric drive and new methods of industrial production — all this suggests that there is no future in high oil prices. And the sooner we start adapting to this reality, the more stable is our development”, — concluded Siluanov.

Last week the Minister of economic development Alexei Ulyukayev, in his article in the “Gazette” also warned that even high prices will not help Russia “to return” in 2000-ies, when the economy added on average 7% per year. The Minister warned that the world economy since then, much has changed and not being able to fit into the “new normal”, Russia risks getting stuck on inappropriate for her average annual GDP growth rate of 2%.

“The rate for the Russian economy are unacceptable, as it leads to a decrease in our share in the global economy, loss of competitiveness, the fall in the standard of living of the population relative to most countries,” — said the head of Ministry of economic development, describing a very real problem on the trajectory of four percent GDP growth. In new conditions the main engine of economic growth, according to the Minister, should be to intensify investment, primarily in infrastructure.

Earlier, presidential Commissioner for entrepreneurs ‘ rights protection Boris Titov called the unpredictability of decisions taken by the authorities and generally incomprehensible economic policy the main concern of the Russian business concerns. “Not even a demand, it is in second place, not even aware of, the volatility of the ruble — in the third place, not even the taxes in fourth place, and the interest rate on the fifth, and in General a global problem which is in Russia, — the obscurity of economic policy”, — said Titov.