Russia’s economy by 2035, will increase in two times in comparison with the current year, experts of the Center for strategic research (CSR), the Chairman of the Council which is ex-Finance Minister Alexei Kudrin. In its analytical note (have) prepared jointly with the Ministry of economic development, leading research fellow, Ranepa Pavel Trunin and head of the Economic expert group Evsei Gurvich write that in the medium term, annual GDP growth will be 2-2,5%, however, by 2025-2030, it will accelerate up to 4-4,4%. The doubling of GDP in 19 years — “not so ambitious goal”, if you watch it on an annual rate, said Trunin .
The implementation of the forecast is possible, if Russia will conduct structural reforms, indicates Trunin. Forecast CSR — target, in the base case, it is possible to agree with the forecast “base plus” by the Ministry of economic development, which is expected to be 20 years of stagnation. CSR believes that the reforms will affect not only the economy but also the institutions of international and interregional relations, etc., said Trunin. The strategy of CSR should be ready to spring next year around this time to be held and reforms, he said. Now some of the proposals, particularly on taxes and the budget is already there, but until the stage of negotiation, moreover, is not yet finished calculations on the cost of reforms, he points out.
The forecast assumes that the “exit of the Russian economy’s sustainable growth rate is not below average, while ensuring macroeconomic balance,” States the note. Growth driver should be the production of high-tech goods and services. In particular, the authors assume that the export of manufactured goods from 2017 will increase by 6% per year and will exceed $450 billion by 2035, or about 60% in the export structure (in 2016 its share is 34%). In turn, the growth of the manufacturing industries (3.5% per year) will spur the growth of industry, which will reach 3% per year in 2020-2035.
The projection had taken into account demographic, energy and other constraints that exist now and will continue in the future, said in a note. The population quickly will not grow, so growth is possible due to the growth of labor productivity, said Trunin, adding that this would require investment in human capital.
Industrial production will increase by 28% in 2025 and 70% after ten years, manufacturing will increase by 35% and 94%, respectively (compared with 2016). The growth in the mining and production of electricity, gas and water will be no more than 1% per year.
Experts have predicted the growth of the service sector. All this, in their expectation, will be accompanied by a slowdown of inflation: it will reach the Central Bank’s target of 4%, and then continue to decline to 3.9% and 3.8% in 2018 and 2019, respectively. By the mid-2020s, the rate of inflation will decrease to 3.2%, in 2030 to 2.7 percent, and in 2035-m — up to 2.4%.
The slowdown in prices will occur against the background of the recovery in consumer demand, forward to the CSR. This will help to increase the annual salaries by 3-4% (by 2035 they will grow 1.9 times). Due to this, by 2035, half will grow and the retail trade.
For economic growth and should ensure the attraction of investment — both internal and external, said Trunin. According to the forecast of the CSR, they will increase 2.7 times by 2035. This should reduce risks for investors, in particular through the reform of institutions.