Russian government approves development forecast to 2010

The Russian government approved on Friday scenario for the economic development of the country in 2008 to 2010, Russian news agencies reported.

The Economic Development and Trade Ministry's forecast for Russian economic development in 2008-2010 was based on two scenarios, one moderately optimistic and the other moderate. Both assume a gradual drop in the price of Urals crude oil, from 55 U.S. dollars in 2007 to 50 dollars in 2010.

The two scenarios differ in terms of forecasts for the competitiveness of Russian goods, and the scale and intensity of implementing measures and investment projects aimed at accelerating economic growth.

The moderately optimistic scenario forecasts a relative improvement in the competitiveness of Russian business and the activation of structural changes through the realization of measures to accelerate economic growth.

Under this scenario GDP will grow 6.1 percent in 2007, 5.9 percent in 2008-2009 and 6.1 percent in 2010, and industrial production is to grow 4.3 percent in 2007, 4.5 percent in 2008, 4. 7 percent in 2009 and 4.5 percent in 2010.

The moderate scenario forecasts how the economy might grow against the backdrop of low growth in hydrocarbon exports and the continued inability of Russian goods to compete against imports. Under this scenario, GDP growth rates would drop from 6.8 percent in 2006 to 5.2-5.3 percent in 2009-2010.

The main provisions of the moderately optimistic forecast are a high pace of economic growth and investments, and a high pace of income growth on that basis. These are three characteristic features of the forecast, Deputy Prime Minister Alexander Zhukov said.

He added that parameters of the forecast will be specified and updated in the future, and will become a foundation for other documents. However, "the main features stay the same," the deputy prime minister said.

He noted that parameters laid down in the forecast would help the economy "develop at a higher pace than the world economy on the whole as well as seven most industrialized nations of the world."

Source: Xinhua