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Economists and Officials Disagree On Recovery Forecasts

Published: February 24, 2014 (Issue # 1798)




  • Photo: For SPT

According to government predictions, state companies spending plans are likely to pull the economy out of stagnation toward the end of the year. Other economists, however, remain skeptical of these forecasts.

Figures for January released last week did not give grounds for optimism, and recent news reports have said that Russia may be headed into a recession.

Government officials remained hopeful despite State Statistics Service data showing that direct investment slumped 7 percent compared to the year before while analysts expected a 1.5 percent growth and retail sales growth slowed to 2.4 percent against 3.8 percent growth in December.

Unfortunately, the economy continues to stagnate, but we anticipate an end to this stagnation will come in the second or third quarter, said Deputy Economic Development Minister Andrei Klepach, PRIME Business News Agency reported Friday.

Several economists interviewed by The Moscow Times disagreed with his relatively rosy outlook.

Judging by the falling levels of investment and production output, we are likely entering a recession, said Valery Mironov, deputy head of the Higher School of Economics Center for Development Institute.

Related: Ruble Continues Fall, Lowest Level Since 2009

Usually a local recession lasts for two to three quarters. So in the third quarter we should be talking not about an end of stagnation but about coming out of a recession, which either has already started or will start soon, Mironov said.

One driver for the reverse trend, Klepach said, will come from state companies like Gazprom, which saw a sharp drop in investment two years ago.

Speaking before investors in Hong Kong, Finance Minister Anton Siluanov echoed the words of his colleague on Friday.

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