A top Russian official sounded a bullish note Friday on the underperforming economy, predicting a return to robust growth toward the middle of this year.
Deputy Economy Minister Andrei Klepach said at a conference in Siberia’s Altai region that the Russian economy was expected to pull out of its current stagnation in the second and third quarters.
According to government estimates, the economy is set to expand by around 1 percent in the first three months of 2014 amid weakened consumer spending and investment and constrained demand for oil and natural gas.
“There will be no strong pace with the existing trends and rules of the game. Nonetheless, the economy will start emerging from stagnation, both due to revival of external markets and because the sharp drop in investment at (state energy giant) Gazprom and other state companies will cease taking their toll,” Klepach said.
Klepach said about two-thirds of the drop in investments recorded in 2013 were accounted for by reduced investments at Gazprom.
“Now they are stabilizing, and from 2015 they should begin increasing somewhat,” he said.
Klepach also sounded a reassuring on the ruble, which has seen a dramatic slump in value in recent weeks. Major factors behind the sliding ruble this week were plans by the Economy Ministry to buy foreign currency for the Reserve Fund and the deepening political crisis in Ukraine.
The minister said the ruble was unlikely to crash, adding that inflation would not exceed the target for this year and was likely to stay at 5.3 percent, even in the wake of the currency devaluation.
“We see no factors or conditions for the ruble to crash,” Klepach told the Winter Grain Forum in the Altai region in southwest Siberia. “The ruble will keep weakening moderately.”
A weaker ruble means larger profits for Russian exporters and a windfall for the state budget, which is dependent on revenue from commodity exports.