"The GDP is increasing at an annual average 6 per cent. That is not enough to double it on schedule-which does not mean we shall not cope. We can make quicker progress, in principle." If Russia is to meet the target, it has to thoroughly change its economic policies and business practice. "The task demands strategic decision-making, to which we have not got down yet.
"Take Russia's most lucrative field-oil-and-gas industry. Even here, to enhance petroleum exports, we have to commission huge mainlines. Then, there are huge new gasfields to develop. All that demands seven to ten years," said the expert.
Other economic fields offer even bigger problems, so even the fairly moderate growth rates the ministry is forecasting are hard to achieve.
As ministerial experts see it, Russian industrial progress will drop pace-6.3% for this year, 5.8% next, 5.6%, 2006, and 5.7%, 2007, as the petroleum race slows down. This race is very stimulating as it makes Russia break up new oilfields, lay pipelines and build petrochemical works. There is another danger for Russian industry-highly competitive imports. "Progress will be ever harder, but I hope quality will improve," said Mr. Klepach.
There is every reason to expect inflation keeping within a predicted 10 per cent this year. The ministry forecasts 6.5-8.5 per cent for next year, 7.5 per cent 2006, and roughly 6 per cent, 2007.
The population's real incomes will grow apace, though somewhat slower than now. The forecast for this year is 9.3 per cent, 8.8 per cent next year, and slightly below 8 per cent later on-as against 13.7 per cent last year, on State Statistical Committee data.
The ministry expects average real wages to increase by 13 per cent this year, 12 per cent next, and slightly over 10 per cent later on.
The rapid public income growth is "alarming, to an extent". Incomes are progressing quicker than consumption and labour efficiency-and the scissors will grow next year, to all appearances. That will make Russian-based manufacturers ever less competitive to present bad problems.
The real rouble rate will not rise higher than 7 per cent this year, say ministerial experts, proceeding from Central bank forecasts. This is a stringent limit, considering a 5.9% rouble rise of the year's first five months.
A 3.5% rise is expected next year, 5% 2006, and slightly below that in the years to come.
If the rouble rises not higher than 7% this year, the national economy will remain competitive. "This optimistic forecast largely reflects policies the Central Bank is making, and was previously intending to make.
"Nevertheless, the real effective rouble rate may go 9 or even 10 per cent up within the year. Be that as it may, the Central Bank has a chance to keep the rise within 7 per cent. That is a hard job, but it can be done," concluded Andrei Klepach.
