Russia’s economy will face a recession risk in the autumn unless it adopts stimulus measures, Economy Minister Andrei Belousov said.
Russia expects growth to slow to 2.4 percent this year compared with a previous estimate of 3.6 percent, according to revised forecasts published by the Economy Ministry on its website today. In the worst case scenario, gross domestic product will increase 1.7 percent in 2013.
“We will propose economic stimulus measures,” Belousov told reporters in the far eastern city of Blagoveshchensk today. “We need to get out of the situation we are in to avoid recession.” While Russia’s economy isn’t contracting, “there is such a risk,” he said.
Russia, the world’s largest energy producer, faces an economic slowdown as Europe’s debt crisis prompts companies to cut investment. The expansion eased to 2.1 percent in the fourth quarter of 2012, the slowest pace since a recession in 2009. Prime Minister Dmitry Medvedev’s medium-term target is for 5 percent growth.
Belousov’s deputy, Andrei Klepach, said there is a “real slowdown” that started in the second quarter of last year and is largely caused by weakening exports. While the risk of recession exists, the economy probably “won’t slide into” it, he told reporters in Moscow today.
One of the most important stimulus measures required is to provide companies with better access to financing and lower interest rates, Klepach said. The Economy Ministry is also arguing for tapping into one of the country’s two sovereign- wealth funds for investments in the economy, he said.
GDP will expand 2.1 percent in the second quarter of the year and about 3 percent in the second half, Klepach said. First-quarter recorded estimated growth of 1.1 percent, he added.
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