Global economic growth will be 1-2% in next 5-7 years -Dvorkovich
MOSCOW. Oct 21 (Interfax) - Global economic growth will not exceed 1%-2% per year in the next 5-7 years, Russian Presidential Aide Arkady Dvorkovich says.
"The IMF said we can achieve sustainable global economic growth of 3%-4%. I do not think it makes much sense to expect that. What lies ahead for us, unfortunately, is a period of rather slow growth in the global economy, perhaps 1%-2% per year for several years, at least 5-7 years," Dvorkovich said at a conference in Moscow.
For Russia this will mean a reduction in demand for its goods, including the oil and gas sector. "If nothing more significant is done, there will be a low rate of growth for the Russian economy as a whole," he said.
Such a forecast can have an impact on all the key indicators: budget policy, social development indicators and the financial sector, he said.
"Right now there is no reason to expect a radical scenario," he added.
The Economic Development Ministry's forecast on GDP growth takes into account the implementation of a series of measures to achieve this growth.
Budget policy is a key issue, Dvorkovich said. "One of the most pressing issues, and it is one reason why Alexei Kudrin no longer works in the Finance Ministry, is the issue of budget policy," he said.
The main thing is not that certain spending items are growing, but what is happening to the budget as a whole.
"I was always in absolute agreement with Kudrin here - that we should understand what limit we have and give priorities within that. We should not look at the situation only in selected areas," he said.
Dvorkovich said he was in favour of increasing funding for education, healthcare and various other areas that do not receive sufficient funding.
The potential of stabilizing the budget situation through improving tax administration and raising the efficiency of budget spending without radical changes to tax rates is serious underestimated in Russia, the presidential aide said.
"I think the potential with the current tax system is several hundreds of billions of rubles over several years," he said, adding that from just two sectors - trade and construction - an extra 200 billion to 300 billion rubles could be raised over five years by improving tax administration.
