In 2010, the Russian economy will grow by 4.25%, after falling 7.9% last year. This forecast was made yesterday by the International Monetary Fund.
Foreign experts expect a “moderate recovery of the Russian business.” It will be caused by a gradual increase of household incomes and decrease in unemployment. In 2011, the economic growth will slow to 4%. Inflation is expected to be 6% in 2010 and 5.5% in 2011.
“This is one of the rare occasions when the IMF forecast coincides with our view of the situation in the economy,” said Aghvan Mikaelian, general director of FinExpertiza Company. “By our estimates, the GDP in the current year will grow by 4.2%, while inflation will exceed 6%, but will not reach 7%.”
Most experts from the IMF are concerned with the budgetary issues. The deficit has grown significantly during the crisis. The authorities had to allocate no less than 10% of the GDP for economic development.
“Approximately three-quarters of anti-crisis incentives go towards the increases in pensions. Therefore, reduction of expenses will be required in other areas,” IMF experts say.
“Russia has unnecessarily high costs of maintaining the state machine and law enforcement agencies,” agrees Agvan Mikaelian. “Officials and security forces can be reduced by 20 - 25% without loss in quality of work.“
In a weary world of endless US military interventions, sanctions, trade tariffs and chaos, let’s pause and take stock of the shining house on the hill