FBK GT’s Economic Club Experts Look Back at 2019

Achievements and disillusions of the departing year, the future of the dollar and the prospects of the ruble, official statistics and economic environment. These were some of the issues discussed by top Russian experts at the meeting of FBK GT’s Economic Club.

In his opening speech, Igor Nikolaev, the Director of FBK Strategic Analysis Institute, said that the year brought us a series of evident economic achievements, although all of them have certain specifics. For example, the inflation was below 4%, but that was possible mainly because household income and purchasing power were also decreasing. And it is certainly good to have 8 trillion rubles in the National Wellbeing Fund, but this money is not involved in economic processes. The worse sanction fears were not confirmed but nobody plans to end these sanctions.

“There are also a lot of frustrations. They include continued decline in population and the bad quality of statistics, which even in that state shows that Russians started to eat worse.  The healthcare reform failed, which was admitted by the government. That is why, in short, the year was not the best for the economy. The next year will hardly bring enough growth to meet the requirements of the president’s orders but the catastrophe is also unlikely,” Igor Nikolaev said.

Alexander Knobel, the Director of the Institute of International Economics and Finance under the Russian Foreign Trade Academy, also mentioned a significant growth in direct foreign investments as the year’s achievement.  But he underlined that despite good things, nobody is happy with the economic growth rates.

“The truth is that the government chooses stabilisation at the expense of the growth. So each measure taken to strengthen government reserves (including the National Wellbeing Fund, increasing taxes despite the budget surplus etc.) slows down the economic growth. But if we speak about the year in short – it could have been worse,” he said.

Evsey Gurvich, the Head of the Economic Expert Group, concluded that in the departing year everything connected with the government’s short-term economic policy could be called positive, unlike decisions with long-term effects.

“Why is it like this? Probably, there is strong confidence that this can go on like this forever – issues are tacked as they arise. But it is a risky policy as external conditions that affect the Russian economy may deteriorate at any moment,” he said.

Nikita Maslennikov, an Advisor at the Institute of Contemporary Development, described the year as very controversial. Certain indicators showed an evident growth, but the structural reforms are suspended or unfinished, which makes them toxic for the economy.

“In fact, it seems that we are quickly heading towards the command economy,” Nikita Maslennikov said. 

FBK GT’s Economic Club is a unique discussion platform where journalists can meet well-known economists, politicians and public officials in order to discuss a wide variety of economic issues. Analytical reports prepared by FBK GT are also presented in the Club.