Speaking at the Global Investment & Finance Forum in Moscow, Deputy Premier and Finance Minister Aleksei Kudrin announced that the rate and date of recovery of the Russian economy would be more or less analogous to those of American and European economies.
As far as Kudrin was concerned, future of the Russian economy mostly depended on Washington's actions (even though Europe and not the United States was and remains the principal buyer of gas and oil from Russia).
American economy stopped growing in July 2008. Federal Reserve Chair Ben Bernanke said the United States would emerge from economic recession by late 2009. Complete recovery would take 2-3 years, he said.
A great deal will depend on effectiveness of Barack Obama's plan worth $787 billion. Obama presented the draft 2009 federal budget, last week. Expenditures of the anti-crisis budget amount to $3.1 billion (12 Russian federal budgets).
As matters stand, the forecasts concerning Russian economic recovery do jibe with Bernanke's forecasts concerning the American. The Economic Development Ministry anticipates a 2% drop in the Russian GDP in 2009. Kudrin expects a 2-3% growth of the GDP in 2010.
Considering the Kudrin expects the era of high oil prices to end before long, this forecast is truly optimistic.
It was oil dividends pouring into Russia that encouraged domestic demand which in its turn promoted economic growth in general. End of the era of high oil prices necessitates a different set of bearings in budget and credit policies. The government will have to maneuver between investments and social expenditures to maintain domestic demand. Where credit policy is concerned, an emphasis will be made on the war with inflation.
"Odds are, we will fail to rebuild the gold and hard currency reserves to the previous level over the next several years," Kudrin admitted. (They amounted to $596 billion in August 2008 - Gazeta.)
The Russian economy will have to become innovative at probably the worst possible moment. Processing industries should emerge into the limelight as new locomotive forces of economic development despite the budget deficit, depletion of the Contingency Fund by 2011, and reduction of investments.
