ALEXEI VEDEV: “RECURRENT STAGNATION IS A KEY RISK TO THE RUSSIAN ECONOMY”

In his interview with AiF, Alexei Vedev, Head of the Financial Studies Department, Gaidar Institute, Former Deputy Minister of Economic Development of the Russian Federation, Doctor of Economic Sciences touched upon the factors which might slow down Russian GDP growth.

According to Alexei Vedev, recurrent stagnation is a key risk to the Russian economy. “Even a 4.7% GDP growth in 2021 means that average growth rates in 2020-2021 will be below 1%, which is in line with the trajectory of the past decade. As the world keeps overcoming the implications of the global coronavirus pandemic, pandemic-related risks will persist in 2022 as well, due to new potentially more dangerous mutations of the virus and a low pace of vaccination. Lots of emerging markets (Russia is no exception) have already experienced the burden of an increase in interest rates.

Borrowing costs are growing and are likely to pick up further in 2022, with needs in funding remaining high, too. Soft financial conditions are still a favorable factor, but turbulence on financial markets and volatility of portfolio investment flows pose a substantial risk to the economy,” Alexei Vedev notes.

Saturday, 15.01.2022