Europe News

Russian economy faces 2 lean decades: Report

Moscow, with the Kremlin in the background.
Alexander Zemlianichenko | AP

Russia's economy will perform far worse than forecast over the next two decades, lagging global growth, business daily Vedomosti reported on Thursday, citing Economy Ministry documents.

It said the ministry's strategy on economic development until 2030 warns that Russia will remain heavily dependent on oil and gas, face capital outflows, budget deficits and a growing wealth gap between its regions.

According to the document, gross domestic product (GDP) will grow on average by 2.8 percent annually until 2030, well down on the 4.3 percent envisaged by the ministry in the spring, the newspaper said. Russia's share in global output will decrease to 3.4 percent from 4 percent at present.

Russia's Economy Minister Alexei Ulyukayev appeared to contradict the Vedemosti report, however, telling Reuters on Thursday that he expected the Russian economy to grow by an annual average of 2.5 percent until 2030, citing the ministry's base scenario for long-term economic development.

The new forecast is a revision down from the earlier envisioned 4.3 percent.

"The pace of Russia's economic growth will fall behind the global average in the forecast period (until 2030)," Ulyukayev told journalists.