Economy Ministry forecasts 2004 GDP growth

Russia's GDP in dollar terms will double over the next 5 or 6 years, according to a report of the Russian Economy Ministry delivered at yesterday's government meeting. In 2004, the GDP in ruble terms will grow by 5.2 percent, and in 2005 through 2006 the GDP will be rising 5.9 to 6 percent a year. Experts of the ministry say that the noticeable rise in the GDP in dollar terms will be due to the strengthening of the ruble rate.

According to the ministry's forecasts, in the event world oil prices stay at where they are now, Russia's incomes from exports of oil, oil products and gas will increase by nearly $8bn. Under these circumstances the Central Bank will have to buy up a part of the export revenue currency, but this policy will be restrained by the necessity of keeping inflation in check. The maximum additional accretion of currency reserves may thus be estimated at $4bn.

In addition, the report says that growth in investment demand from fuel and energy sector will raise imports of equipment and also positively affect income growth of domestic industries producing equipment for this particular sector. The rise in people's incomes, in its turn, will spur growth in investments in house building and services.

On the whole, in 2004 fixed capital investments will surge by $2.5bn, i.e. by 11 percent against 2003.