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Thursday 18th of April 2024, 19:09 CET |
| Russia: Economic Forecast |
September 10, 2002
Economist
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Written by Economist Intelligence Unit
Posted by HW on April 17, 2024
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Vladimir Putin, Russia's president, will ensure his continued popularity by focusing on Russia's economic needs. A $40 billion investment deal with Iraq and the sale of nuclear reactors to Iran could be lucrative for Russia. But such dealings have slightly cooled the friendship between America and Russia (probably to the delight of the many conservative forces in Russia, such as the military). The government is fast losing hope about its target date of 2003 for WTO accession, as many additional reforms are needed: corruption and a stifling bureaucracy still hamper foreign investment. While Mr Putin has pushed through important liberalising reforms, enforcement is too often lax. Forecasters polled by The Economist expect GDP to grow by 3.9% in 2002 and 4.2% in 2003, with current-account surpluses of 6.8% and 5.1% of GDP, respectively.
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Key changes from last update
Political outlook
Mr Putin has denounced the notion of raising natural-gas prices to meet WTO entry requirements, a move that may reflect not only concern for the impact of higher energy prices on Russia's poor, but also an increasing realisation that quick WTO entry is unlikely.
Economic policy outlook
Russia's 2003 draft budget, currently awaiting consideration by the Duma, would give more money for the military, judicial reforms and education.
Economic forecast
Industrial output grew by a perky 1.2% in July, and the economy ministry expects this to add 0.1% to Russia's GDP growth for 2002 as a whole.
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