Deutsche Bank forecasts 4.2% economic growth in Russia in 2013

MOSCOW. Dec 11 (Interfax) – Russian economic growth will pick up in 2013 and reach 4.2%, while inflation will go down to around 6%, Yaroslav Lisovolik, a senior economist at Deutsche Bank Russia, says.

Lisovolik told the press on Tuesday that one of the main reasons for such a relatively high rate of GDP growth in 2013 would be high oil prices, which are expected to average at around $113.5 per barrel of Brent amid improvements in the global economy.

GDP growth in 2012 will probably be a little lower than the 4% predicted earlier due partly to lower oil prices and partly to high volatility on global markets.

“Unfortunately, we did not see a new phase of reforms in Russia in 2012 and we hope that we will see them next year. Russia needs structural reforms as they are an important factor in a country’s economic growth,” he said.

The Deutsche Bank economist said he still has great hopes for infrastructure growth in Russia and investment growth as key factors in economic growth. “So far spending efficiency on developing infrastructure is very low, preventing a boost in investment. Moreover, it is necessary to raise private capital because it will be impossible to achieve an investment breakthrough through budget funds alone,” he said.

“The main risk factors for the economy are the delay in structural reforms, chronic capital flight, exhausting the country’s economy and the fall in oil prices,” he said.

Lisovolik said he predicts capital flight may slow down next year as steps are taken to improve the investment climate in Russia. Net capital flight will be around $20 billion in 2013, against $70 billion anticipated in 2012.