Finance minister: Russia’s GDP grows 2.2% on year in October

MOSCOW, Nov 20 (PRIME) -- Russia’s gross domestic product (GDP) growth sped up to 2.2% on the year in October, but will fall within the government’s forecast of 1.3% in 2019, Finance Minister Anton Siluanov said on Wednesday during the Russia Calling! business forum.

“We see that economic growth dynamics are picking up speed. In the previous month, in October, we saw growth of 2.2%, and the economy ministry will confirm that. Of course, these dynamics are not consistent. So far, we expect economic growth dynamics to fall in line with our planned figures this year,” he said.

Previously, the Economic Development Ministry estimated the GDP increase at 2% in September, while the Federal State Statistics Service preliminarily put GDP growth at 1.7% in July–September and 1.1% in January–September.

Economic Development Minister Maxim Oreshkin said that Russia’s inflation will be close to 3% in 2019, signaling the lack of demand in the economy.

“No matter how deep you are involved in structural reforms and the supply side reforms. It is important that combined demand meet the potential level. This year we see that inflation will be closer to 3%. It is significantly lower than our and central bank expectations. It means that we suffered from a certain amount of short-received combined demand this year,” he said.

A shortfall in demand results in shortfalls in household incomes, companies’ profits, and in budget revenue. The lack of demand exceeds 1 trillion rubles, with household incomes turning out to be 500 billion rubles smaller than expected and revenues of companies falling 200 billion rubles short, he said.

The central bank has reacted to the situation, and the government has to work together with the regulator to restore the combined demand to the level corresponding to inflation of 4%, he said.

(63.7730 rubles – U.S. $1)

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