Russian Economy Needs New Growth Model Amid Unfavorable External Factors - Central Bank

MOSCOW (UrduPoint News / Sputnik - 21st November, 2018) Transformations in the Russian economy must be carried out for the transition to a new growth model in unfavorable external conditions, the central bank's governor, Elvira Nabiullina, said Wednesday.

"Today, all of us, the government, Bank of Russia, parliament, business, and Russian society as a whole, have to do a lot of work to increase the productivity of labor and potential growth. It is necessary to increase labor productivity, improve the business climate and increase investment. We need to make reforms, shift to a new growth model in unfavorable external conditions and high uncertainty," Nabiullina said at the plenary session of the lower house of the Russian parliament on the monetary policy of the Central Bank.

The economic growth in Russia was currently limited by structural factors, including low labor productivity, Nabiullina added.

According to Nabiullina, the Russian economy faces external challenges related to oil, monetary policy normalization in the United States and its impact on the situation in emerging markets, as well as sanctions risk.

The Central Bank of Russia expects Russia's GDP to grow by 1.5 - 2 percent in 2018. In 2019, the CBR forecasts a decline in GDP growth rate to 1.2-1.7 percent. In 2020, the growth rate of the Russian economy will be 1.8-2.3 percent, and the forecast for 2021 stands at 2-3 percent.