HSE spoke about a possible “lost decade” for Russia

According to a review by the Development Center of the Higher School of Economics (HSE), if Russian GDP this year is only 1.3% higher than in 2008, then by the presidential elections in 2018 we can talk about a “lost decade” for the country. Slon Magazine reports this.

“If GDP stabilizes at the current level, the economy will shrink by 0.7% at the end of the year, which is close to the consensus forecast for the current year (minus 0.8%). As for the coming years, without creating real conditions for reviving entrepreneurial activity, it is difficult to be optimistic,” the review says.

The authors of the report characterize the situation in the Russian economy in recent months “as a fragile balance with a minus sign.” Despite the slight economic growth in the second quarter of this year, a decline was recorded in basic industries.

“Similar to the well-known saying “he who does not collect, spends,” we can say that an economy that does not grow rots, losing its chances of resuming growth, in any case, without strong external positive shocks or the adoption of some drastic institutional measures,” - the experts emphasized in the report.

At the beginning of August, HSE experts announced that the Russian economy was shrinking on a “broad front”, almost all sectors were operating in the red, and the Reserve Fund could be depleted before the end of the year due to the loss of oil revenues.