Russian reserves can prop economy for 3-year
Thursday, 26 February 2009
MOSCOW, Feb 25 (AFP): Russia will be in a "difficult situation" for the next two years but the government has enough foreign exchange reserves to prop up the economy for three years, a top Kremlin aide said in an interview yesterday.
President Dmitry Medvedev's top economic adviser Arkady Dvorkovich also defended government measures taken to shore up a financial system battered by the worst global slump in decades.
"So far the calculations have been done for the next three years," he told Itogi magazine.
"If we see that the crisis drags on beyond that, we'll make cuts in the 2010- 2011 expenses that are not very urgent and efficient," said Dvorkovich, who holds a master's degree in economics from Duke University in North Carolina.
To support the falling ruble in a controlled slide over the past six months, the government has spent more than 200 billion dollars, draining its foreign currency reserves to less than 400 billion dollars.
Also Tuesday, Russian Economy Minister Elvira Nabiullina said that the budget deficit this year would equal eight per cent of the country's gross domestic product.
That figure, however, includes subordinate loans so "the real deficit will be less," she told Ria-Novosti news agency.
Earlier this year Russia revised its 2009 budget based on a lower oil price of 41 dollars from a price of 95 dollars in the August draft budget.
In a further slowdown of the country's economy, the gross domestic product (GDP) fell by 8.8 per cent in January compared with the same month a year earlier, Interfax on Tuesday quoted a source as saying.
But in the Itogi interview, Dvorkovich, 36, took pains to paint a brighter picture of the country's economy, saying the ruble would be stable if commodity prices stayed within 10 per cent of current rates.
"People should understand-there are no reasons whatsoever to run away from the ruble."
Although the country faces difficulties over the next two years, domestic consumption-oriented industries like housing construction and infrastructure will post growth in the "coming months," the aide said.
Dvorkovich said the government's social obligations came first.
He also defended Russia's generous financial aide and loans to its allies such as Belarus and Kyrgyzstan, saying that it was in Russia's interests to have "reliable, stable" neighbours.
Although the scope of the crisis has caught governments all over the world off guard and it remained unclear what will pull the global economy out of its slump, it was no use being worried all the time, he added.
"You should not have a hang-up about anything," said Dvorkovich.
"One needs to find time for everything and reload occasionally and it's not worth waiting for apocalypses, that's for sure."
President Dmitry Medvedev's top economic adviser Arkady Dvorkovich also defended government measures taken to shore up a financial system battered by the worst global slump in decades.
"So far the calculations have been done for the next three years," he told Itogi magazine.
"If we see that the crisis drags on beyond that, we'll make cuts in the 2010- 2011 expenses that are not very urgent and efficient," said Dvorkovich, who holds a master's degree in economics from Duke University in North Carolina.
To support the falling ruble in a controlled slide over the past six months, the government has spent more than 200 billion dollars, draining its foreign currency reserves to less than 400 billion dollars.
Also Tuesday, Russian Economy Minister Elvira Nabiullina said that the budget deficit this year would equal eight per cent of the country's gross domestic product.
That figure, however, includes subordinate loans so "the real deficit will be less," she told Ria-Novosti news agency.
Earlier this year Russia revised its 2009 budget based on a lower oil price of 41 dollars from a price of 95 dollars in the August draft budget.
In a further slowdown of the country's economy, the gross domestic product (GDP) fell by 8.8 per cent in January compared with the same month a year earlier, Interfax on Tuesday quoted a source as saying.
But in the Itogi interview, Dvorkovich, 36, took pains to paint a brighter picture of the country's economy, saying the ruble would be stable if commodity prices stayed within 10 per cent of current rates.
"People should understand-there are no reasons whatsoever to run away from the ruble."
Although the country faces difficulties over the next two years, domestic consumption-oriented industries like housing construction and infrastructure will post growth in the "coming months," the aide said.
Dvorkovich said the government's social obligations came first.
He also defended Russia's generous financial aide and loans to its allies such as Belarus and Kyrgyzstan, saying that it was in Russia's interests to have "reliable, stable" neighbours.
Although the scope of the crisis has caught governments all over the world off guard and it remained unclear what will pull the global economy out of its slump, it was no use being worried all the time, he added.
"You should not have a hang-up about anything," said Dvorkovich.
"One needs to find time for everything and reload occasionally and it's not worth waiting for apocalypses, that's for sure."