UPDATE: Cbank head says Russian econ starts to find new growth model

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MOSCOW, Nov 14 (PRIME) -- The Russian economy has started to acquire a new growth model after a two-year adaptation period, the central bank’s Chairwoman Elvira Nabiullina said in a speech at the State Duma, the parliament’s lower house, on Monday.

“Perhaps, the most important outcome of a two-year period of adaptation of the economy to the new conditions is that the economy has started to discover a new development model. The goal of the central bank here is to support this process, to ensure stable financial conditions to form the internal sources of investments,” Nabiullina said.

The recovery of the economy has already started but the completion might take a quite long time, she said.

“The economy has behaved better than the majority of economists projected. But this must not lead to an optimistic approach. Then, in 2008–2009, the economy recovered very quickly amid a newly started oil price growth… Now, the recovery of the economy might be protracted in time because other factors must play roles than before the oil price sinking,” Nabiullina said.

She said that the economy will see at least three tough years before the recovery. The central bank expects that gross domestic product (GDP) will increase slightly in 2017 “but we see that the processes in various industries, in various regions are still heterogeneous and unstable.”

High inflation has remained the main problem for Russians, leaving behind the rest of the issues that the economy faces, she said.

A launch of economic stimuli can cause a fast but short-term growth of the economy and will conserve the former inefficient economic model. “A decrease will follow inevitably, our country will be back at the bottom of the ladder and will lose time which could be used to create conditions for quality growth,” Nabiullina said.

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