Comments on the Article: Low Investments Prevent Growth in Russia Carried by the Financial Times

Participants in the St. Petersburg International Economic Forum which is currently underway express concern that the Russian economy has exhausted its potential of growth.

Such concerns were caused by a dramatic reduction of investments in Russia: "Slowdown apparently has caused concern. Some factors are of a global nature, others are of a local one, says Yuri Soloviev, Chairman of the Board of the VTB Bank. Investments in Russia have slowed down a great deal. It is partially the result of low borrowings in the corporate sector and slowdown in the financial sector"1.

In fact, according to the data of Rosstat the index of investments in capital assets in the Russian Federation in January-April 2013 shows negative dynamics (see Fig. 1); it is to be noted that in April and January-April investments amounted to 99.3% and 99.8% of the respective indices of the previous year, respectively. 


 Source: Rosstat

Fig. 1. The index of investments in capital assets of the Russian Federation (% of the previous period), January-April 2013

Such dynamics of investments in capital assets justified slowdown of economic growth in the 1st quarter of 2013 (in that period GDP growth amounted to 1.6%, while in the 1st quarter of 2012 it was equal to 4.8% as compared to the same period of the previous year2); according to A. Siluanov, Minister of Finance of the Russian Federation the economy has exhausted its potential of growth3.


Experts stress that the problem of reduction of investments in the Russian economy cannot be solved unambiguously at the expense of growth in public spendings or by means of monetary policy measures because it is a deep-rooted problem which is related to low quality of institutes and, consequently, the unfavorable investment climate. In our view, at present the chief priority of the economic policy should consist in upgrading of quality of the institutes.


М.V. Kazakova, PhD, Head of the Economic Development Department

1 See:
2 According to the preliminary estimates of the Ministry of Economic Development, in January-May 2013 GDP growth remained at the level of January-April and amounted to 1.8% as compared to the same period of the previous year.