UPDATE: Official: Russian GDP growth cannot exceed 1-1.5% with current investment

(Specifies growth, investment range in headline, lede, second paragraph)

MOSCOW/KRASNOYARSK, Feb 19 (PRIME) -- Russia’s gross domestic product (GDP) cannot grow by more than 1–1.5% per year if investment remains at the current level, Deputy Finance Minister Maxim Oreshkin said in a speech at an economic forum on Friday.

“Taking into account the Russian demography, if we remain in the current investment range of 17–18% (of GDP), it is impossible to get a more than 1-1.5% (economic growth),” Oreshkin said.

Deputy Prime Minister Arkady Dvorkovich said that investment policies of the Finance Ministry are dubious, “We must have no fear of investment, including government investment, if this is effective investment bringing profit. The Finance Ministry’s approach in this sense always raises doubt.”

Oreshkin said that structural changes in the economy must precede investment increase.

“If we look at the current situation on the labor market, we will see that there is no large unemployment in the country, it is at the minimal level. This means that if we want to invest more we must withdraw more people from the current employment structure and send them to work to other sectors. These structural changes cannot take place without structural transformation.”

The Russian economy may swing to growth in April–June already, but it will fall in 2016 in general, Oreshkin said.

“Our current account balance has adjusted to U.S. $30 per barrel, or we cut imports further, it also hit consumer demand, and prices rose, but less than last year,” he said.

Stabilization of oil prices supports economic growth, Oreshkin said.

End