Mixed outlook for Russian economy

Dec 13th, 2011 | By | Category: Rouble News

Russia's economic outlook appears somewhat mixed in the closing weeks of 2011 as GDP predictions show impressive improvements, buy more about but the global financial climate looks set to hold things back.

Third quarter data from the Moscow-based Federal Statistics Service revealed that the economy grew at its fastest pace in more than a year, thanks largely to agricultural output, retail sales and construction.

Indeed, the gross domestic product expanded by 4.8 per cent between July and September in comparison to the same period in the previous year. Furthermore, this is the fastest pace of growth recorded since the second quarter of 2010, suggesting that the country is well on its way to recovery following the global financial crisis and the drought of recent months which affected the agricultural industry.

However, the Organisation for Economic Cooperation and Development, (OECD) has also announced this month that Russian economic growth is set to be constrained over the course of the coming years, due to a poor business environment and energy inefficiency issues.

The group suggested that GDP may only expand by 4.1 per cent in the run up to 2014, following its impressive return to growth this year. The OECD explained: “[It] is not fully exploiting opportunities provided by Russia’s rich endowment of natural resources and the high skill level of its population.

“A glaring and persistent handicap for the functioning of the Russian economy is the poor business environment. This is holding Russia back from becoming the modern, diversified, innovative economy that it aspires to be.”

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