Ulyukayev: GDP decline won’t exceed 3% in 2015; industrial output to drop 1%-1.5%

MOSCOW. April 8 (Interfax) – The decline in Russia’s GDP in 2015 will not exceed 3%, industrial production will drop 1%-1.5%, and investment in fixed assets will fall 11%, Economic Development Minister Alexei Ulyukayev said.

“We assume that this year under the most conservative estimate of the oil market situation – $50 per barrel – we will have a decline of no more than 3% of GDP, the drop in industrial production will be in the neighborhood of 1%-1.5%; we expect a positive trend in agriculture. The main thing of course is investment. Overall, we forecast investment to fall roughly 11% this year, with a significantly smaller decline in capital investment by the state – approximately 3.7% – and a significantly larger decline in private investment,” Ulyukayev said during government hour in the State Duma.

The minister said that according to the ministry’s estimate, Russian GDP for January-February 2015 fell by 1.9% year-on-year, and industrial output fell by 0.4% and agriculture rose by 3%.

“The serious fall is above all connected with the so called non-tradable sectors, that is, trade and construction, where import substitution has no effect. Therefore with a 6% fall in retail turnover and a 6.4% fall in investments, but the decline in investments is actually a drop in construction by 3% or so. They also determined the fall in GDP,” the minister said.

Nevertheless, he said that the decrease is lower than was expected at the end of last year, and now the ministry is preparing an adjusted forecast for the next three-year period.

“But the main thing is that this is not simply forecasting the tendencies that will contribute objectively. It is very important to determine the set of mechanisms, which will allow for the improvement of the situation,” he said, noting that the ministry is preparing a target forecast, which proposes reaching growth rates of 4% in 2017 and 5% in 2018.