Russian economy still stagnating, Q3 growth almost zero – Klepach

Andrei Klepach file photo

(Interfax – MOSCOW, October 16, 2013) The Russian economy is still stagnating, with zero GDP growth in Q3 this year on a seasonally adjusted basis, Deputy Economic Development Minister Andrei Klepach said at a meeting of the State Duma’s budget committee.

“The forecast was that we would reverse the tendency for economic growth to slow and this stagnation, which we are essentially seeing not only in the first half but also the third quarter, that is almost zero GDP growth,” Klepach said.

“The 1.8% growth estimate for this year is, I would say, now an optimistic one, because an extrapolation (of the current tendency) gives about 1.5-1.6% GDP growth for the year. But we are looking at some sort of upswing at the end of the year, especially in investment demand, and retail services,” he said.

Klepach said economic growth could accelerate to 3%-3.3% a year in 2014-2016.

A better foreign economic state of affairs is a factor that drives higher GDP growth, as is an increased rate of investment in 2015-2016, he said.

The freezing of tariffs for the services of Russia’s natural monopolies in 2014 could prompt a substantial drop of investment in infrastructural sectors in the short term, Klepach said. However, a positive effect is expected later on from these measures on account of optimized company activities in these sectors, and on account of improved sector financial condition, which to a large degree will depend on energy resources and transportation costs, he said.

Also, Klepach said, the implementation of state programs will have a positive effect on the dynamics of investment in the economy.

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