Securing Stability and Growth

29 Pages Posted: 9 Jun 2011 Last revised: 28 Dec 2012

See all articles by Zeljko Bogetic

Zeljko Bogetic

World Bank

Sergei Ulatov

World Bank

Olga Emelyanova

affiliation not provided to SSRN

Victor Sulla

World Bank - Research Department

Date Written: June 8, 2011

Abstract

Russia has seen even higher oil windfall in the past few months, which translates into likely fiscal surpluses 2011 and 2012. The government should not miss the opportunity provided by a large oil windfall to substantially improve its long-term fiscal position, further reduce inflation, and, therefore, ensure a strong basis for durable stability and healthy growth in the future. Rising domestic demand and credit activity are increasingly supporting solid growth. As a result, we maintain the growth outlook for Russia at 4.4 percent in 2011 and 4.0 percent in 2012, closer to the post-crisis long-term potential growth. Overall, labor market conditions improved recently while poverty was broadly flat during and after the crisis, but unemployment and poverty in many regions remain difficult. Further reductions in poverty will require greater policy focus and persistence in implementing more effective and targeted programs, especially in the poorest regions.

Two new special-topic analyses focus on export diversification in Russia, and food and energy inflation in Europe and Central Asia region. In the first, results show that productivity is key to exports and that lack of competition and entrepreneurial innovation are relevant obstacles to the emergence of new, potentially exportable products. In the second, it is shown that food and energy prices in Russia and other countries in Europe and Central Asia are contributing significantly to consumer price inflation, complicating anti-inflation policy and poverty reduction.

Keywords: Russia, Russian Federation, macroeconomy, stability, growth, diversification

JEL Classification: P2, P3, P5, H6, F14, F4

Suggested Citation

Bogetic, Zeljko and Ulatov, Sergei and Emelyanova, Olga and Sulla, Victor, Securing Stability and Growth (June 8, 2011). World Bank Russian Economic Report No. 25. Available at SSRN: https://ssrn.com/abstract=1860107 or http://dx.doi.org/10.2139/ssrn.1860107

Zeljko Bogetic (Contact Author)

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Sergei Ulatov

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Olga Emelyanova

affiliation not provided to SSRN

Victor Sulla

World Bank - Research Department ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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