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Kudrin's Thinktank Warns of Systemic Crisis
28.11.2014 12:18
Kudrin's Thinktank Warns of Systemic Crisis
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Russia is facing a systemic crisis that is destined to change the economic model and the relationship between the state and the public, says a think tank led by former finance minister Alexey Kudrin.

      Russia’s GDP is expected to go into the red zone next year, says Andrey Klepach, former deputy economic development minister, deputy chairman of the Vnesheconombank.

      The economy may shed another 0.3-0.4 percent in 2015, but the cut might be bigger, he warned.

      Officials admit there is a possibility for a replay of the 2008-2009 scenario.

      This is more pessimistic than the projection given by the Higher School of Economics.

      Earlier, the government said it was not going to support the national currency and does not expect oil prices to go as low as $60 per barrel, says the Finance Ministry.

      The rouble registered a new low against the dollar amid tough sanctions, uncertainty in Ukraine and the Yevtushenkov case involving Bashneft’s stocks.

      The country could lose up to $50 billion, or 4 percent of GDP, due to sanctions and a drop in oil prices.

      According to a report by Russia’s Finance Ministry, the geopolitical events would cost Russia 2 percent.

      Maxim Oreshkin, head of the long-term strategic planning department, said the economy’s response to external shocks was surprisingly soft.

      Russia sparked a wave of criticism after it incorporated Crimea into its territory following a referendum on the peninsula with a large ethnic Russian population.

      The US and the EU imposed a raft of sanctions on Russian officials and individuals with close ties to the Kremlin. 

Author: Mikhail Vesely

Tags: Alexey Kudrin     

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