Official: Russian economy in short-term balance

MOSCOW, Apr 19 (PRIME) – The Russian economy’s balance is only short-term, it cannot be called sustainable, Deputy Finance Minister Maxim Oreshkin said during a conference on Tuesday.

“We can state that the economy is in a short-run equilibrium. The balance of payments is stable in general, the current account surplus meets all external needs and demand for foreign currency in the Russian economy,” Oreshkin said.

“Another question is whether this economic equilibrium we have reached will be maintained in the long term. An unambiguous answer here is ‘no’. One of main reasons of possible risks in the future is the situation with the budget… A significant primary budget deficit of about 3% of course is unsustainable.”

Earlier in April, President Vladimir Putin said that Russia must ensure consistent economic growth and contain budget deficit at no more than 3% of Gross Domestic Product (GDP).

Oreshkin said that the economy is still influenced by long-term oil fluctuations, adding that it faces demographic problems, its labor market is not flexible enough, and there are also problems with efficiency of capital allocation.

“These problems must be resolved first of all in order to reach a new economic balance with a more sustainable and high economic growth,” Oreshkin said.

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