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© RIA Novosti. Vladimir Fedorenko

Russia’s economy at worst since global crisis – minister

by RIA Novosti at 18/09/2013 15:57

Russia’s gross domestic product (GDP) is growing too slowly to pull the country out of its worst economic situation since the 2008 global financial crisis, the country’s economic development minister said Wednesday, and the stagnation is unlikely to improve in 2014.

Alexei Ulyukayev said during a “government hour” meeting in the State Duma – the lower chamber of the national parliament – that the revised estimate of 1.8 percent year-on-year GDP growth for this year, which was announced last month, is “unsatisfactory.”

“It seems to me that we haven’t had such an unfavorable situation in the last five years, since the crisis,” he said. “This year, for the first time, we have a level of economic development that’s below the world average… Unfortunately, we don’t see opportunities in 2014 to get up to the world average.”

Ulyukayev noted that the economic slowdown began at the end of last year, and attributed the stagnation to “strong demand constraints” and lack of investment. According to the Economic Development Ministry, Russia will suffer $70 billion in capital flight this year, indicating a critical lack of demand for major investment projects, he said.

As a result, Russia will continue to trail the other BRICS emerging economies – Brazil, India, China and South Africa – in terms of growth.

“We’re going to have nearly the same rate as the United States, which is coming out of recession,” Ulyukayev said.

Russia downgraded its 2013 growth forecast for the second time this year in August, when it slashed its estimate from 2.4 percent to 1.8 percent. April’s prediction of 2.4 percent was itself a revision of an earlier estimate of 3.6 percent growth.

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