Russia’s economic growth may slow to two percent unless the government succeeds in developing its non-raw material sectors, Economic Development Minister Elvira Nabiullina said on Tuesday.
“Economic growth will promptly fall to two or three percent a year in case of further dominance of raw materials and fuel sector in the economy as it is now, maintenance of non-competitive institutions and a troubled business climate,” Nabiullina told a forum.
The country’s economic development may get stuck at the level of Japan, which is recovering from the natural and man-made disasters of 2011. Russia’s economic growth was 4.3 percent last year, while in 2012 the government expects 3.7 percent growth on the basis of Urals oil price at $100 per barrel.
A fall in growth rates by 0.7-1.7 percent will cause “a rapid loss of [Russia’s] share of the global market and, what is most important, will reduce opportunities for increasing incomes and living standards, so such growth rates are unacceptable for us,” Nabiullina said.
As of January 2012, energy resources make up 75.4 percent of total exports from Russia. Experts warn that the Russian economy’s dependence on commodity prices has increased in recent years.
“The effect of extensive factors for growth has been diminishing, so intensive factors [such as] higher labor efficiency and investment in fixed assets, should be used,” Deutsche Bank Russia chief economist Yaroslav Lisovolik told gazeta.ru on-line newspaper.
Preservation of the existing economic system is in danger from a significant fall in growth in the next few years, he added.