Russian economic growth rate will be at 6 per cent this year

Tuesday, January 19, 2021

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Russian economic growth rate will be at 6 per cent this year, with capital investment to start reviving, forecasted Poul M. Thomsen, IMF Senior Resident Representative in Moscow, and IMF European Department senior adviser. He was addressing a 3rd banking conference, "Stake on Russia", now underway in London. These annual conferences were launched by The Banker, The Financial Times group's monthly journal. "We expect this year's increase roughly at 6 per cent. Though it is much less than last year, the investment inflow will start reviving," Thomsen said. He does not think Russia's gross domestic product ought to increase quicker than at an annual 5-6 per cent rate. Otherwise, it will boost up inflation, warned the expert. He thinks that is just why the Russian government has to make a choice between a 5-6 per cent increase, with inflation in control, and a quicker progress with galloping inflation. All that implies certain economic political problems, Thomsen said as he called on the Russian government to make use of high global petroleum prices for long-necessary reforms-in particular, of housing, public utilities, administration, and the use of natural resources. Not only high petroleum prices promote Russian economic progress but also rising public consumption, and an increase of the population's real incomes and labor efficiency. Economic progress will go on even if petroleum prices get down, he encouragingly remarked. Another conferee, Hubert Pandza-Business Group Director for Russia of the European Bank for Reconstruction and Development, analyzed in his address banking reform prospects, and current achievements and problems. He highlighted EBRD top priorities for the banking reform of this year through 2008-to make banks more competitive, enhance capitalization requirements, streamline merger and absorption procedures, and improve banking inspection with an emphasis on crisis management. The conferees are debating corporate and banking capital investment promotion, analyzing Russian bank restructuring and privatization, and taking stock of opportunities for retail banking operations and for crediting market development. Represented at the conference are the Fitch rating agency, Globex Bank, and the Russian-based Sberbank, Rosbank and Promsvyazbank, to name just a few.

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