| The government has finally abandoned the goal of doubling GDP Yesterday, at its regular meeting, the government's budget commission tried to come up with the most correct of all forecasts of economic development until 2009. Based on this forecast, budgets for the next three years will be written.
The main dispute over the “correctness” of the forecast, as usual, occurred between the country’s chief financier Alexei Kudrin and chief economist German Gref. The first believed that first of all it was necessary to fight against rising inflation and, consequently, to strengthen the ruble. The second, represented by his deputy Andrei Belousov (it was he who delivered a conceptual report at the commission meeting instead of the chief economist), insisted that “one can pay for a slight increase in inflation for greater rates of economic growth.”
The discussion at the commission meeting ended up looking quite straightforward. Alexey Kudrin, as befits a finance minister, was endlessly interested in how spending budget money would affect economic growth. And I did not receive an answer “in numbers” from my opponents. “There is no justification,” Mr. Kudrin stated with satisfaction. To which Mr. Belousov replied: “I, Alexey Leonidovich, will rewrite the economics textbook and send it to you.” Mr. Kudrin did not remain in debt and gladly agreed: “Send, send!..” (By the way, according to the law “On information openness of government bodies”, ministers cannot write “love letters” to each other, which means that all of them are not may be requested by citizens.)
When the disputes entered the clinch stage - either ruble for ruble and fight inflation tooth and nail (Mr. Kudrin’s role), or economic growth, which is very harmful from an unreasonably and rapidly strengthening ruble (Mr. Gref’s role) , - Head of the Cabinet of Ministers Mikhail Fradkov actually chose a compromise option. Not too high growth and a slowing rate of ruble strengthening.
The Ministry of Economic Development and Trade, under the leadership of Mr. Gref, has already recalculated the main forecast for the country’s socio-economic development based on the price of oil, which is higher than the previously existing forecast by as much as 4 dollars. Instead of forecasting the price per barrel of oil for 2007 at 54 dollars, the Ministry of Economic Development and Trade increased it to 58. Accordingly, for 2008 - to 53 dollars and 2009 - 48 dollars.
In addition, the country's chief economist will have to come to terms with a more significant increase in tariffs for natural monopolies. Gazprom raised its forecast level by as much as 4-5%. In 2007, the increase in gas tariffs will be 15%, in 2008 - 14%, in 2009 - 13%. In accordance with the requests of the gas monopoly, the electric power industry will also increase its tariffs. In 2007 - by 10%, in 2008 - by 9%, in 2009 - by 8%. And railway workers for passengers: in 2007 - by 12%, in 2008 - by 11% and in 2009 - by 10%.
An increase in tariffs of natural monopolies will increase inflation by 0.5% per year. So next year the government predicts inflation of 6.5-8%, and in 2009 - 4.5-5%. According to most ministers, this is a minor increase. But economic growth (see reference) will fall short of a level that could lead to a doubling of GDP in 2010, quite significantly. There is no 7.2% annual growth even in the most optimistic scenario. So the government has already de facto forgotten about this task, considering it obviously impossible.
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The Ministry of Economic Development and Trade has raised its forecast for Russia's GDP growth in 2006 from 6.0 to 6.1%. The forecast was revised, including due to an increase in export estimates for the current year, as well as due to more optimistic expectations in the mechanical engineering, metalworking, and forestry industries. The forecast for industrial production growth for 2006 is 3.9%.
According to the base, or so-called “moderately optimistic” scenario, GDP growth in 2007 will be 5.7%, in 2008 - 5.6%, in 2009 - 5.7%. There is also an “optimistic option”, according to which GDP growth in 2007 will be 5.8%, in 2008 - also 5.8%, in 2009 - 6.0%. Previously, the government predicted GDP growth in 2007 at 5.7%, in 2008 - 5.8%, in 2009 - 6.0%.
In nominal terms, GDP in 2006 is expected to be 26.420 trillion rubles, in 2007 - 30.250 trillion rubles, in 2008 - 33.790 trillion, in 2009 - 37.590 trillion.
The new forecast for the ruble to dollar exchange rate at the end of 2006 is 26.9 rubles. per dollar (in the previous forecast it was 27.4 rubles), according to the results of 2007 - 26.5 rubles. (27.6 rubles), for 2008 - 26.9 rubles. (27.8 rubles), 2009 - 27.3 rubles. (28 rubles). The Ministry of Economic Development also increased the forecast for the strengthening of the real effective exchange rate of the ruble: to 6-7% in 2006 (in the previous forecast it was 6.5%), by 5.1% in 2007 (2.8%), by 1.3%. -- in 2008 (1.1%), by 0.9% in 2009 (0.4%). Vera KUZNETSOVA |
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