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Economic engine turned off
14.07.2005 00:00

Gloomy times are in store for Russia in the next couple of years, overshadowed by volatile inflation rate and slower GDP growth, meagre investment and ramshackle infrastructure.
      
      
       The government exhausts all its effort looking for lucrative scheme and effective steps but seems unsatisfied with the outcome. Neither is the population. Social benefits law introducing payments instead of various exemptions could pour waves of funds into economy triggering a tsunami of inflation. The forecast for this year is 11-11.8%.
      
      
       GDP figures are disappointing: 5.4% for the first half year (3.6% for industrial output), as well as outflow of money abroad. The trend is strong here, with $29.8bn and $4.8bn of private capital being salted away in foreign assets against $33bn and $9.4bn last year.
      
      
       Incoming oil-gained funds boost the Stabilization Fund, which runs idle because Mr Gref does not see any projects worth financial attention in Russia.
      
      
       Another problem is poorly diversified economy, with frequent and terrible standstills in the regions.
      
      
       On the whole, Russia seems to put too much hopes on economy itself, rather than to take up drastic initiatives and implement them crashing on red tape and failure-like attitude to itself.
      


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