Russia’s Ministry of Economic Development does not rule out a scenario of the economy’s recovery next year. Minister of Economic Development Alexey Ulyukaev presented the macroeconomic forecast at a briefing chaired by President Vladimir Putin. The forecast is feasible unless the ruble reinforcement faces any obstacles. Besides, the minister highlighted the importance of attracting private investments.
The policymaker suggests the government should maintain a tough monetary policy to encourage Russian and foreign investors to allocate funds to non-commodity sectors of the Russian economy. Officials at the ministry are expressing the optimistic stance on the national currency after its slump in 2014 and 2015. Analysts reckon investments are likely to expand by 8.7% by 2018, while the Russian ruble is expected to strengthen to 54 versus the US dollar.
On the flip side, households’ incomes will shrink by 2018 on the back of the ruble reinforcement and the economic recovery. The Ministry of Economic Development projects a 3.3% contraction. Alexey Vedev from an analytical think tank notes that Russia’s economic agency suggests a program of enhancing economic efficiency at the expense of lower private consumption. The ministry does not foresee social spending cuts in the public budget.
