According to an IET expert, the RF Government overstates the forecast of GDP growth in the budget for year 2005
Publication date
Wednesday, 15.09.2004
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Moscow. September 8. INTERFAX – AFI - According to Sergei Drobyshevsky, the head of the laboratory of monetary policy of the Institute for the Economy in Transition (IET), the RF Government overstates the forecast of GDP growth underlying the draft federal budget for year 2005, what increases the risks in the case oil prices decline next year.
In the course of the briefing held on Wednesday, he reminded that the draft federal budget for year 2005 proceeded from the forecast that GDP would grow by 6.3 per cent, while inflation rates would make 8 to 9 per cent.
At the same time, according to IET experts, next year the expected growth of GDP will make 5.5 per cent, what is related, on the one hand, to diminishing investment activity and, on the other hand, a significant real effective Ruble appreciation as compared with the Government forecast. According to IET estimates, the Ruble (in real terms) will appreciate by 6.5 to 6.9 per cent as compared with the currency basket, while the Government is forecasting the real effective Ruble appreciation by 3.2 per cent.
S. Drobyshevsky stressed that the Government overestimated the real growth of GDP failing to appraise in full the processes underway in the economy. According to S. Drobyshevsky, “It is likely that the real growth of GDP will be below the level at which it is targeted.” The IET expert also expressed his opinion that the overstatement of the rates of growth of GDP may be related to the goals faced by the Government. “It is likely that there is the task to double GDP, and the figures try to attain the objective” added Sergei Drobyshevsky. At the same time, the IET expert stressed that the overstatement of the rates of growth of GDP increases the risks for the budget in the case oil prices decline. “If the oil prices decrease by US $ 2 to US $ 3, the Government will fail to ensure the amount of revenues set by the budget” said S. Drobyshevsky. The draft federal budget for year 2005 proceeds from the estimate that next year the average yearly price of Russian oil will be at US $ 28 per barrel.
Moscow. September 8. INTERFAX – AFI - According to Sergei Drobyshevsky, the head of the laboratory of monetary policy of the Institute for the Economy in Transition (IET), the RF Government overstates the forecast of GDP growth underlying the draft federal budget for year 2005, what increases the risks in the case oil prices decline next year.
In the course of the briefing held on Wednesday, he reminded that the draft federal budget for year 2005 proceeded from the forecast that GDP would grow by 6.3 per cent, while inflation rates would make 8 to 9 per cent.
At the same time, according to IET experts, next year the expected growth of GDP will make 5.5 per cent, what is related, on the one hand, to diminishing investment activity and, on the other hand, a significant real effective Ruble appreciation as compared with the Government forecast. According to IET estimates, the Ruble (in real terms) will appreciate by 6.5 to 6.9 per cent as compared with the currency basket, while the Government is forecasting the real effective Ruble appreciation by 3.2 per cent.
S. Drobyshevsky stressed that the Government overestimated the real growth of GDP failing to appraise in full the processes underway in the economy. According to S. Drobyshevsky, “It is likely that the real growth of GDP will be below the level at which it is targeted.” The IET expert also expressed his opinion that the overstatement of the rates of growth of GDP may be related to the goals faced by the Government. “It is likely that there is the task to double GDP, and the figures try to attain the objective” added Sergei Drobyshevsky. At the same time, the IET expert stressed that the overstatement of the rates of growth of GDP increases the risks for the budget in the case oil prices decline. “If the oil prices decrease by US $ 2 to US $ 3, the Government will fail to ensure the amount of revenues set by the budget” said S. Drobyshevsky. The draft federal budget for year 2005 proceeds from the estimate that next year the average yearly price of Russian oil will be at US $ 28 per barrel.
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