UPDATE: Kudrin: Structural reforms can spur 3% Russian GDP rise in 2019

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MOSCOW, Jan 13 (PRIME) -- Russia’s gross domestic product (GDP) can rise more than 3% in 2019 and more than 4% in 2022 if structural reforms are implemented, Alexei Kudrin, chairman of the Center for Strategic Research, one of the key Russian economic strategists, said at the Gaidar forum on Friday.

“It is quite difficult to reach this rate… I’m citing a forecast of our possible economic growth rate in case of implementation of systemic institutional and structural reforms which allow us to reach a level of more than 3% by 2019 and more than 4% by 2022. These are projected things, something can be done earlier, something later,”Kudrin said.

“We would manage to double the GDP under a target scenario by 2035 and raise it by only 50% under an inertia scenario,” Kudrin said, adding that the government and the president must make serious and extraordinary steps to relaunch the economy.

“The old model of the economy obviously doesn’t work already today, we have talked much about this but it has not been launched in the framework of a new model. Decisive steps which would create and launch the new model of the economy are not being taken,” Kudrin said.

A state administration reform in order to accelerate decision making must be fulfilled right now, Kudrin said.

Russia’s technological lag is one of the most worrisome issues that must be addressed, he said. “We have faced the trouble of a technological lag from the rest of the world. This is the most serious challenge, I think, that we will face in the next 10–15 years. It means shrinkage of our economic potential, decline of the living standards of people.”

Kudrin also named demographic issues, investment limits including those due to sanctions, low labor productiveness and low state administration quality as important hurdles to the economic growth.

He said that reduction of the state share in the economy and deregulation of industries in order to create a competitive environment are important to be fulfilled within six to 10 years.

Kudrin also said that Russian inflation must decrease to 2–2.5% in the medium term in order to create conditions for existence of long-term money.

An production cut agreement of the OPEC states will have only a short term effect, and the Russian government must not hope that oil prices will be sustainably high: “It (the oil price) will range between U.S. $40 and $60 per barrel over the next five–10 years,” Kudrin said, adding that shale oil development in the U.S. will likely keep the price in a $40–50 range.

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