What does 2017 bring for Russian economy?
Transition from recession to modest growth was the main result of Russian economy this year, economists said in an interview with Vestnik Kavkaza, speaking about the most significant economic events of 2017.
The advisor on macroeconomics to the CEO of the 'Opening-Broker' brokerage house, economist Sergey Hestanov, noted there was transition from decline, that lasted for many years, to modest economic growth. "I can confidently say that Russian economy has stabilized and adapted to life under new conditions, when oil costs not $120 but $50-60 per barrel. In order to adapt we had to cut spendings at all levels: federal programs, regional budgets, business and citizens. This kind of adaptation can't really be called comfortable, but, on the other hand, this behavior of the economy greatly reduces all possible risks, including external risks," he explained.
In other words, 2017 marked the end of old cycle of economic growth in Russia. "Russian economy and, to some extent, the world economy have began preparation for a new growth cycle. Right now it's hard to foresee what will it look like, which sectors will grow faster, which will grow slower. In any case, stabilization after decline is a success," Hestanov said.
The professor at the department of the stock market and investments at the Higher School of Economics, Alexander Abramov, agreed with this opinion. "Transition from recession to modest growth went absolutely fine and didn't really depend on the efforts of economic block of the government. Transition to growth itself is a development that we welcome. However, Russia still cound't create a program of measures that must be taken in order to carry out structural reform," he said.
He expects that stability of the ruble exchange rate will be maintained. "Of course, it largely depends on oil prices, but serious drop is not expected, and if there are enough foreign-exchange reserves, Russia will be able to keep the dollar exchange rate at a more or less stable level," Abramov believes.
The Chairman of the Board of the National Currency Association (NCA), Dmitry Piskulov, noted that 2017 turned out to be quite a good year for Russian economy. "Active import substitution continued this year, just like the growth of agriculture and growth of demand for domestic products, including domestic tourism, although the growth is pretty modest, but it's still a positive trend," he said.
At the same time, he pointed out that compared to crises of 2014-2015, when the ruble exchange rate fluctuated, the volatility of financial markets greatly decreased this year. "Fluctuations were smaller, volatility declined, which is bad for speculators, but good for the economy, since stable situation allows us to calculate risks in the long term," he stressed.
The head of the department of stock markets and financial engineering of the Faculty of Finance and the Banking Business of RANEPA, Konstantin Korischenko, mentioned two points that will be remembered about 2017. "Firstly, we can already say that we got out of the crisis. All indicators improved, including GDP growth, low inflation, growing foreign-exchange reserve and import substitution. Secondly, after getting out of this crisis, we're at a crossroads and we must decide where to go now. It's most likely, that stability in all areas will remain next year," he said.