The Russian economy is growing more slowly than expected. This has not only economic causes, but also political and other. About the background our correspondent Miodrag Soric.
The World Bank has lowered its growth forecast for Russia for the current year to 1.5 percent. Only a few months ago she expected 1.8 percent. “With this, the Russian economy grows only half as fast as the global economy,” complains Valery Viktorivich Mironov, a professor at the Moscow School of Economics in conversation with Deutsche Welle.
This has political and psychological reasons, he says. Although the revenue from the oil export in 2018 was much higher than expected. However, the resulting additional revenue was reinvested only to a small extent. Companies as well as the state saved for economically difficult times, which obviously count on many in Russia.
Kremlin promotes protectionism
It is still unclear whether the US will continue to tighten the sanctions screw. The Kremlin promotes protectionist tendencies. The government ratio increases year by year. The development of a strong middle class is not progressing. The Russians have less money in their pockets as a result of the VAT increase and the pension reform – and spend less accordingly.
No wonder that the World Bank remains pessimistic for the coming years. By 2020 and 2021, the Moscow engine will hardly start. The World Bank expects growth below two percent. The forecasts of the Kremlin are much more optimistic. President Putin announced 20% growth in 2021. But the doubts remain.
Western investors more reserved
Even with Western investors. Although German companies want to invest over 626 million euros in the Russian economy in 2019 – and thus significantly more than last year. So at least a survey of the AHK among 168 German companies. But overall, the number of German companies in Russia is decreasing. Almost two out of three German companies believe that the Russian economy will stagnate in 2019. 41 percent are optimistic, pessimistically 23 percent of respondents look to the future. Wolfgang Büchele, chairman of the East Committee of the German Economy (Oaoev), puts it in a nutshell in Berlin: “Investors need a long-term stable environment”. That’s exactly what is lacking in Russia.
But there are also signs of hope. For example, the weak ruble favors exports, writes Valery Viktorivich Mironov. If the Kremlin succeeds in solving its political problems, Russia’s economy would grow significantly faster. But the Misnk process is stalling, negotiations with Japan over the future of the Kuril Islands are dragging on, and relations with the US are not in sight.
All these are indications that Russia’s economy will continue to grow slowly in the coming years.