Will the forecasts of the Ministry of Economic Development and Trade come true?

At the end of the previous month the Ministry of Economic Development and Trade has stated that it expects the exit of the Russian economics from the stagnation in the 2nd – 3rd quarter 2014. The Deputy Minister Andrey Klepach, addressing the Winter Grain Conference, has noted that the GDP growth in Russia could reach about 1% for January-March of the current year. According to preliminary estimates of the Ministry, in January 2014 the economic growth in Russia made 0,7% at an annual rate, fell by 0,5% in comparison with December 2013.

According to the forecasts of the Ministry of Economic Development and Trade, made public in February of the current year, the GDP growth will reach 1,5-2% in the 2nd quarter 2014. And at year-end the economic growth will make 2,5%. However, Klepach has noted that if February trends remain constant in the long term, the annual forecast may be corrected to 2,3%.

Besides, Andrey Klepach has made public the projected values of inflation for the year 2014. According to his opinion, the growth of devaluation of the rouble won’t have a serious impact on the price level and at year-end the inflation value won’t pass the limit of target diapason and by year-end 2014 it will reach most probably 5,3%. According to the Deputy Head of the Ministry of Economic Development and Trade, the main factor, having an influence on the dynamics of inflation, will be the movement of the exchange-value of the rouble. However, devaluation effect will have an impact on domestic prices in about 2-3 months, when the residual stock, purchased at old prices, will be sold out from warehouses.

However, market players speak about the rise in prices as early as March of the current year. So, according to data of the enquiry of representatives of Russian retailers, published on the 15th of March, the rise in prices for imported foods (mainly perishable: vegetables, fruit, fish) and alcohol made on average 15% in comparison with the beginning of the current year. By that the experts associate such changes not only with depreciation of national currency rate, but also with increase in costs, because the value of the services of carriers and customs charges enhance.

Evaluating the objectivity of the forecast of the Ministry of Economic Development and Trade relating to the future of the Russian economy, it should be noted that it was done before the Crimean crisis. Today it is difficult enough to forecast something relating to Russian economy. External factors have a serious impact on the situation and first of all possible economic sanctions on the side of the Occident. However, the experts point out that in the age of globalization and integration the introduction of economic sanctions will have a negative effect on both sides, especially by worldwide trends of economic stagnation. At year-end 2013 the average economic growth in European countries made 0,2-0,5% per annum.

An additional point is that country's leadership has declared the mirrored answer in case of the introduction of sanctions towards Russia from the side of the West yet. By this Moscow has realized several threatening towards countries of European Community, among other things it has stopped the import through Klaipeda port, what has seriously damaged the economics of Lithuania – one of the most vocal supporters of the introduction of sanctions.