UPDATE: Russia’s industrial output may fall in 2018 – VEB

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MOSCOW, Nov 20 (PRIME) – Russia’s 2018 industrial production is likely to contract from the level of 2017, Andrei Klepach, chief economist and a deputy CEO of state development bank Vnesheconombank (VEB), said on Monday at a panel meeting of the United Russia ruling party.

“Unfortunately, there will be no industrial breakthrough in 2018. We’ve already had industrial slowdown this year, and it is very likely that we will have an even smaller output in 2018 than we have in 2017 taking into account everything what is happening now,” he said.

This does not mean that Russia should reject the goal of reaching the breakthrough, but it will not happen soon.

“We have to change many things. We say that we’ve launched an industrial policy…but we need to reformat it seriously,” he said.

Klepach also said that Russians’ real disposable income fell 10% in 2014–2016 and may remain flat in 2017, while income of public-sector employees will restore to the pre-crisis level only after 2020.

“If we take what we've included into the budget, I mean the macroeconomic forecast that the (parliament’s lower house) State Duma has partially approved, we see that the real disposable income of public-sector employees will restore to the pre-crisis level after 2020,” he said.

Over the previous three years, the real disposable income contracted 10%.

“So far, we also see a decrease this year, but I think we will reach zero dynamics or close to zero. Still, this is a colossal failure, comparable to what we had in 1992,” he said.

The Federal State Statistics Service said previously that Russia’s industrial output remained flat on the year in October after rising 0.9% in September, and it grew 1.6% in January–October. The Economic Development Ministry forecasts Russia’s industrial output to rise 2% in 2017 and 2.5% a year in 2018–2020.

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