Russian economy to experience ten most difficult years

Russia’s Finance Minister Aleksei Kudrin stated at a recent press conference in Moscow that the upcoming ten years would be quite a difficult period for the national economy. The reduction of crude output and the unstable pension system will create serious problems in the Russian economy, the minister said.

Photo: Russian economy to experience ten most difficult years

Aleksei Kudrin stated that the extraction of black gold increases by two percent in the country during the economic growth of eight percent. The share of the oil and gas sector in the nation’s GDP, which currently makes up 21 percent, will drop to 14.5 percent.

“The share of the oil and gas sector in the GDP and the maintenance of oil and gas revenues, which contribute greatly to our current living, decreases every year,” the minister said.

“We will have to start spending the reserve fund, and we will continue spending it till 2022. The national pension system will experience instability during these ten years. They will be the most difficult years for the Russian economy,” the minister said.

The demographic situation will become one of the most serious challenges for the Russian economy, the minister added. The number of citizens involved in the economy will reduce by one million people, which will affect the pension system. Aleksei Kudrin said that the government will most likely have to make complicated and unpopular decisions to solve the problem.

The head of the Finance Ministry said Russian companies would suffer from the reduction of their revenues during the upcoming three years, which in its turn will affect income tax funds.

President Medvedev submitted his first budget message for the period of 2009-2011 to the Cabinet of Ministers and the Federation Council several days ago. The head of state highlighted the struggle against inflation as the government’s major goal for the nearest future.

Utro