Russia’s GDP is unlikely to reach the annual level of 5-7% even amid high oil prices, Economic Development Minister Aleksey Ulyukayev said in an opinion piece published in Vedomosti daily on Thursday.
According to Ulyukayev, Russia faced a recovery growth of 7% on average in 2000-2008 backed by the low cost of labor and other factors of production and its assets on the whole as well as additional capacity utilization amid favorable global environment on commodity and capital markets, Russian news agency (TASS) reported.
The growth consisted of a number of factors, such as surging fixed assets (2.2%), rising number of employed (0.3%), export expansion (1.5%) and an increase of combined factor productivity (1.4%), the article said, while the virtual GDP growth of 1.5% exceeded the potential level of 5.4% mainly due to fast growth rates of crude prices.
"It is next to impossible to repeat the achievement due to the fact that a number of factors - both domestic and external - have been run out of, which is related to deep structural changes in the global economy that has been shifting to the state of a 'new normal’.
This state implies flattened out growth rates in countries with developing and developed economies, the lack of new leading countries able to demonstrate high growth rates for a long period of time, a rapid development of technologies causing a slowdown of demand for raw materials resources and a de-emphasis on those resources as a factor triggering growth and investment attractiveness," Ulyukayev said.
Russia's economic policy should be focused on raising potential growth, which can be achieved by using labor force, capital accumulation via growth of investment as well as enhancing labor and capital efficiency, the minister said, adding that it is quite realistic to double potential growth, which means getting to the 4% of GDP upward curve.