Russian economy could decline 3%-4% in 2013 - Kudrin
ST. PETERSBURG. June 23 (Interfax) - Former Russian Finance Minister Alexei Kudrin believes a 3%-4% decline in the country's economy in 2013 is very likely even as the authorities expect GDP to increase next year by 3.8%.
"Today I give over 50% to the development of the negative crisis scenario crisis and Russia's entanglement in this crisis," he told journalists on the sidelines of the St. Petersburg Internatioanl Economic Forum.
Commenting on accessing special support packets for the economy, Kudrin said that it would be necessary to tap them only if GDP falls by over 3%-4% in annual terms. "Prior to this, reserves should be maintained. In this sense, they wouldn't be kept safe because but used in order to substitute shortfalls in revenue. They will be spent but their expenses should be increased only if GDP declines by over 3%-4%," Kudrin said.
He said that a 3%-4% decrease in GDP next year would be "very likely."
However, Kudrin said that a 3%-4% decrease in GDP would not be "critical" for the cyclical development of the economy. "This is an unavoidable development during a cyclical crisis," he said. He added that a cyclical crisis should not be feared, adding that "no amount of funds would avert it and the use of funds would become less effective."
According to Kudrin, the peak of the crisis would start after GDP declines by over 3%-4%. He added that the decline in the previous crisis came to 7.8%. "That's a situation where reserves should be tapped. It is possible to start at 3% or 4% [decline]. This depends on how sufficient these reserves are," he said, adding that would be necessary to introduce support measures in order to solve social problems, as well as resolve halts in operations at enterprises, rising unemployment payments, and equipment purchases.