Russian Economic Slowdown A Worry, But Is No Recession – First Deputy PM

Igor Shuvalov file photo

(RIA Novosti Yakutsk, April 2, 2013) The government is concerned about a slowing of economic growth in Russia at the start of 2013, however it does not signify a recession, First Deputy Prime Minister Igor Shuvalov told journalists.

In January-February, GDP growth in Russia stood at 0.9 per cent compared to last year’s figure of 4.3 per cent, and in February this growth slowed to a margin of error level, 0.1 per cent. Industrial production fell by 2.1 percentage points against last year’s growth of 4.9 per cent.

“There is no recession, we are just talking about the economic growth rates we will finish the year with and what we need to do to grow at a faster pace,” Shuvalov said.

He said this issue had been discussed on Tuesday (2 April) at a meeting chaired by Prime Minister Dmitriy Medvedev in Yakutsk and discussions would continue in Moscow.

Earlier, the deputy head of the Economic Development Ministry, Andrey Klepach, also said that current trend in the Russian economy did not represent a recession as in 2008. The Economic Development Ministry sees them as a “pause in growth”.

At the same time, Shuvalov said that these trends do cause concern for the Russian government. “Of course they do (cause concern – RIA Novosti)… (ellipsis as received) The situation is such that we do not want to report on arithmetic, we need real, good quality growth,” he said.

According to Economic Development Ministry forecasts, growth in Russian GDP in 2013 should increase to 3.6 per cent compared to 3.4 per cent last year; growth in industrial production should also reach 3.6 per cent, compared to 2.6 per cent (in 2012). The ministry will revise its forecast in early April, most likely downwards, since the economy is currently developing at a pace considerably worse than forecast. If this trend persists, then GPD growth for the year will be below 3 per cent and even below 2 per cent, Klepach said.