- Sputnik International
World
Get the latest news from around the world, live coverage, off-beat stories, features and analysis.

Russia's GDP to grow 6.5% in 2006 - EBRD - 1

Subscribe
The growth of Russia's gross domestic product in 2006 will be 6.5%, the European Bank for Reconstruction and Development said in its annual Transition Report Monday.
(adds details after paragraph 1)

LONDON, November 13 (RIA Novosti) - The growth of Russia's gross domestic product in 2006 will be 6.5%, the European Bank for Reconstruction and Development said in its annual Transition Report Monday.

The EBRD said Russia's GDP grew 7.1% in 2004 and went up 6.4% in 2005.

The bank's report said structural reforms should be accelerated in order to stimulate labor efficiency, despite a favorable climate for growth.

The report also said Russia's budget surplus is projected at nearly the same level as last year's, or 7.5% of GDP.

The bank said that despite higher oil prices than those fixed in the federal budget, the government still exercises spending restraint.

The report said the Stabilization Fund, set up to accrue windfall profit from high world oil prices, has proven that it is a good instrument to regulate budget surplus, and that the fund will be large enough to cover a moderate budget deficit during cyclic economic declines.

The fund grew 74% in the first 10 months of 2006, reaching $76.62 billion as of November 1, 2006, compared to $44 billion as of January 1, 2006.

The report also said that further proof that the state finance system has strengthened has been the early repayment of part of Russia's debt to the Paris Club of Creditor Nations.

Russia is paying off its foreign debt mainly from the Stabilization Fund, which hit $76.9 billion as of July 1. Russia repaid the bulk of its outstanding debt to the Paris Club on August 18-21. The debt totaled $1.9 billion as of October 1, compared to $23.7 billion on July 1.

The EBRD also said that a significant reduction of inflation in the first half of 2006 to less than 10% on an annualized basis was due to the continuing remonetization of the economy and an unofficial administrative control over prices.

The report warned that a further growth of budget expenditures could disrupt Russia's hard-won price stability.

Newsfeed
0
To participate in the discussion
log in or register
loader
Chats
Заголовок открываемого материала