Russia”s Siluanov Bemoans Lack of Investment to Kick-Start Growth

Russia’s Siluanov Bemoans Lack of Investment to Kick-Start Growth

By Andrey Ostroukh
MOSCOW–A lack of investment is crimping Russia’s economic growth potential, Finance Minister Anton Siluanov said
Tuesday.
Speaking on Russian state TV, Mr. Siluanov said that the economy may return to growth by the end of the year.makeAd(‘4′,’300×250′,’mktsnews’,’article’,”,”);
After growing by 7% a year an average in 2000s, Russia’s gross domestic product shrank by 3.7% in 2015 and has
continued to contract, the result of low oil prices and Western sanctions. Analysts’ views on exactly how the economy is
set to perform this year differ, but the consensus is that lower consumer demand, inflation, a weak ruble, and falling
capital investment are taking their toll.
Mr. Siluanov said that investment should become the main driver of economic growth instead of consumer demand.
For the economy to expand, Russia should contain any appreciation in the ruble to discourage a rise in imports, he
said.
The finance minister reiterated his commitment to cut budget deficit by one percentage point a year and balance the
budget in the next three years, based on an average oil price of $40 per barrel. A lower deficit would open the door for
a rate cut by the central bank.
Otherwise, Mr. Siluanov said, inflation would spike again and there will be a need to raise taxes.
Several Russian officials had told The Wall Street Journal that Russia is already exploring a raft of potentially
unpopular new tax measures in the coming years as the oil-dependent country runs out of ways to plug holes in the
budget. The government is considering raising income-tax levels and increasing value-added tax though any changes would
only take place after 2018 when the country’s next presidential election is due.
Write to Andrey Ostroukh at andrey.ostroukh@wsj.com

(END) Dow Jones Newswires
05-17-160409ET
Copyright (c) 2016 Dow Jones & Company, Inc.

This article appears in:

Economy

, Energy


Download

Leave a Reply

Your email address will not be published. Required fields are marked *