Russia’s target economic forecast strives for 4.5% GDP rise ‘19

MOSCOW, Apr 21 (PRIME) -- The Russian Economic Development Ministry bases its most optimistic target forecast for 2016–2019 on an average oil price of U.S. $40 and sets the goal to reach a 4.5% gross domestic product (GDP) rise in 2019, according to documents released by the ministry on Thursday.

“The basic concept of the target scenario is the increase of the economy efficiency through stimulating investment demand by reducing current consumption. In fact, this is a transition from a growth model based on consumption, to an investment model of development,” the ministry said.

Investment growth is forecast at 7–8% annually.

The economy will rise 0.4% in 2017 and accelerate to 2.9% in 2018.

Inflation is planned to reach 4% in 2017 and remain at this level.

The basic forecast of the ministry, which the Finance Ministry will use in budget planning, also assumes a $40 oil price but the GDP growth is not expected to exceed 2.2% in the forecasted period.

The ministry also made a conservative forecast based on an oil price of $25 per barrel. In this case, the GDP will shrink 0.4% in 2017 and grow 1.5% in 2018 and 2019.

Inflation will stand at about 6%, gradually falling to 5.1% in 2019 if the conservative projection fulfills.

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