Russian economy must diversify or face decline – Central Bank


May 30th, 2017 – Fort Russ News – 

KtoVKurse – translated by Inessa Sinchougova 

The Chairman of the Bank of Russia, Elvira Nabiullina, has stated that Russia’s economy in the foreseeable future will be faced with a number of external and internal threats.

The first of the said threats is the general slowdown in global economic growth, said the head of the Central Bank.

The second factor that determines the external conditions for the development of Russia’s economy, according to Ms Nabiullina, is the absence of the ‘world’s overt engines of growth’, placing an increased demand on commodities and other traditional Russian exports.

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“In the past, this role of the engine was played by China, but now economic growth has slowed down and is only growing at the expense of consumption, rather than exports or investment. Most likely, this growth will be more energy efficient. You can talk not only about the end of oil, but also the whole of the end of the commodity super cycle “, – said chairman of the Bank of Russia.

The third factor is the risk of increased volatility in global financial markets. They are associated with the release of the US, and subsequently the Euro area from the policy of quantitative easing. According to the head of the Central Bank, reduced growth and a global demand for traditional Russian exports at a lesser expense, are key factors.

“It is necessary to look for a new export niche in global markets and in global value chains”, – she said.

The absence of points of growth in the Russian economy specifically, not only globally, should have been pointed out, writes Why point out the lack of “engines of growth” in the global economy, when the Russian economy did not show any “points of growth” either? – it asks. Similarly, a rapid decline in the working age population in Russia is a serious concern, as is the continuing decline in the productivity of labor. 

The outflow of “brains” and the inflow of low-skilled staff from neighboring countries should be a topic of urgent attention, writes the publication. 

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