Government forecast for annual GDP growth of 1.5% in 2018-2020 does not meet president’s goal – Belousov

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MOSCOW. April 17 (Interfax) – The government’s forecast for Russian GDP growth in 2018-2020 of 1.5% a year under the baseline scenario does not meet the goal set by the president of achieving growth higher than the global average in 2019-2020, presidential aide Alexander Belousov told journalists.

The government forecast for 2% GDP growth in 2017 is “the maximum possible growth [this year],” he said.

“As of today, the forecast for 2018, 2019, 2020 is based on growth of 1.5% and an investment dynamic of 2%. That is, GDP growth will be lower than forecast for this year [2%] and the dynamic for investment is roughly the same. That does not in any way fit with the president’s instruction on achieving a dynamic higher than the world average rate,” Belousov said.

Therefore, according to him, “the government ordered the Economic Development Ministry to develop a forecast on the basis of those conditions in the scenarios which were presented and the possible specified rates of economic growth on the basis of the dynamic that forms and the measures which were proposed.”

Commenting on the target scenario in the forecast which projects that economic growth will surpass 3% in 2020, Belousov said that “the target forecast, the conservative forecast, these are all certain calculations which will border the main, baseline scenario which the calculations are based on.” He said that “only the baseline scenario is playing an operational role.”

The Russian government approved the baseline parameters of the country’s socio-economic development forecast for 2018 and 2019-2020 at a meeting on April 13. It also set the price ceiling for tariffs on services from natural monopolies during the period, the press office of the cabinet of ministers told journalists.

“The baseline scenario has been adopted as the basis. Moreover, work will continue on adopting the necessary measures in order to reach the target development scenario,” a representative of the cabinet of ministers said.

The baseline and target scenarios in the 2017-2020 forecast were calculated based on a yearly average Urals blend oil price of $45.6, $40.8, $41.6 and $42.4 per barrel respectively. The target scenario presupposes that the government’s plan of action to speed up economic growth currently being prepared is implemented.

The baseline scenario expects GDP growth of 2% in 2017 and 1.5% in 2018-2020. The target scenario sets GDP growth at 1.8% in 2018, 2.5% in 2019 and 3.1% in 2020.