Center for Real Sector

In the course of his speech delivered at the Public Chamber on 8 December 2014, German Gref noted that irrespective of external conditions (primarily the economic sanctions introduced against Russia), the Russian economy could be expected to show negative growth in 2015, or zero growth at best.

According to Gref, it can realistically be expected that Russia's economic growth will be negative in view of her domestic economic problems. Moreover, bearing in mind the great inertia contained by the economy, these problems can take a relatively long time to be solved. Judging fr om his estimates, even if the RF Government's efforts prove fruitful, negative economic growth will remain a high probability in 2016, and the Russian economy will demonstrate zero growth or modest growth no earlier than 2017.
We believe that Gref's forecast looks reasonable. There can be no doubt whatever that the influence of the external economic and geopolitical environment on the Russian economy is indeed considerable. It should not be forgotten, however, that the roots of Russia's current problems are very deep; they long have predated the omset of the present political crisis and the downfall of oil prices.

We also quite agree with the statement that the decline in Russia's economic growth rate observed over the course of the last few years was predetermined by the unfavorable investment climate and by the absence of any major factors of sustainable economic growth. According to our estimates, Russia's national economy has approached the lim it of its productive capacity, because the existing Russian economic growth model has by now exhausted its potential. At the same time, the Russian economy neither possesses any new economic growth factors nor can boast of any reliable prospects for improving the quality of the existing factors (i.e. total factor productivity). In their turn, external factors only add to the already precarious state of Russia's economy.

In a healthy developed economy, the oil and gas sector can by no means be the basis of its development. However, it is clear that the development of a new growth model relying on economic sustainability can only be achieved over a considerable period of time. As far as Russia is concerned, the possibility of providing successful solutions to the current economic problems will be strongly determined by whether or not the Russian authorities can fully realize the gravity of the present situation, and by whether or not they will take timely and adequate measures designed to ensure the Russian economy's sustainable development on an entirely new basis, and not to sweep the problems under the carpet.

Maria Kazakova – Candidate of Economic Sciences, Deputy Head of the International Budget Sustainability Department of the Gaidar Institute.