Medvedev says Russian economy can expand 3% year soon

MANILA, Nov 14 (PRIME) – The Russian economy is able to grow 3% per year soon, Prime Minister Dmitry Medvedev said in a news conference on Tuesday following a summit of the ASEAN states.

In October, the International Monetary Fund (IMF) improved its estimate for Russia’s gross domestic product (GDP) expansion in 2017 and 2018 to 1.8% and 1.6%, respectively. On November 9, head of the permanent representation of the IMF in Russia Gabriel Di Bella said that the fund sees Russia’s economy rising 1.5% a year in the long term, but the country may achieve a growth rate of 3% in seven to 10 years.

“All macroeconomic conditions and a slight budget deficit, which is also contracting and may reach zero or switch to a surplus in a few coming years, allow us to suppose that we will be able to reach these figures (of 3% GDP growth per year) in a rather short period of time,” Medvedev said answering a corresponding question.

US SANCTIONS

The new expansion of U.S. anti–Russian sanctions will cripple relations between Moscow and Washington for decades to come, but Russia is ready for different restrictions, the prime minister said.

In August, U.S. President Donald Trump signed a bill introducing additional sanctions against Russia among several other states. The bill prohibits companies from investing more than U.S. $1 million in a single payment or more than $5 million during the course of a year in construction of Russian export pipelines, as well as provision of goods, services, technologies and information support for the construction.

“This law is significantly bigger that the Jackson-Vanik amendment, because a new law to cancel these decisions will be required. Moreover, even a delay of the date when the rules will come in force requires a more difficult procedure…This means that our relations will be actually crippled for decades to come,” he said.

He added that Russia is ready for different types of restrictions.

“If specific instruments of the law are used, it will hit the European business and interests of the E.U. citizens in the first place, it will create tension on the markets of third countries as new projects will not be implemented, and some other changes are possible, including changes in prices,” he said.

“This law transforms into a competition instrument to a certain degree for promotion of the U.S. LNG on the European market in violation of competition rules. It is obvious, and it actually infuriates many representatives of the E.U. business and some E.U. politicians.”

Overall, Russia’s relations with the U.S. are degrading. “Despite contacts and possibilities for discussion of some topics, our relations are degrading day by day. They are now at their lowest point over the past several decades. I don’t even know what I can compare this with,” he said.

NORD STREAM-2

The initiative of the European Commission to expand the third energy package rules on all pipelines that deliver natural gas to the E.U. is nothing more than a way to exert pressure on Russia and to force it to abandon the Nord Stream-2 natural gas pipeline, Medvedev said.

“This is a very debatable, if not completely absurd, topic from the legal standpoint, as after this they may say that the cover zones of this energy package expands to absolutely all relations in the world,” he said.

“It ultimately looks like as a way to exert pressure on our country and on some other states, including the E.U. members, in order to make us stop construction of the second thread of the Nord Stream pipeline, or to make the work more difficult in any possible way.

“Our approach to implementation of the project is the same. The project is not a political instrument, it is not a way for our country to affect European countries, unlike some states and politicians think. It is completely different. It is a normal commercial project with the goal of ensuring Europe’s energy security, which is obviously beneficial for the Russian Federation as it produces a noticeable additional income for us,” he said.

The Nord Stream-2 project envisages construction of two lines of a natural gas pipeline with an annual capacity of up to 55 billion cubic meters, running from the Russian shore to Germany under the Baltic Sea. Russian gas giant Gazprom will implement the project together with its European partners – Shell, OMV, Engie, Uniper, and Wintershall.

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