Nabiullina told about the challenges facing the Russian economy

© RIA Novosti / Grigory to Sysoeva in fotoreceptor the Central Bank of Russia Elvira Nabiullina. Archival photoNabiullina told about the challenges facing the Russian economy© RIA Novosti / Grigory to Sysoeva the image Bank

The Russian economy in the foreseeable future will have to face several external and internal challenges, primarily to the General slowdown in global economic growth, said Bank of Russia Chairman Elvira Nabiullina.

In the next 5-10 years the economic growth in Russia will be different from those that were the sources of growth in the 2000s the first half of 2010 years, said the head of the Central Bank the journal of the PIEF prepared by Recongress.

External factors

«What are the main external factors determine the conditions in which we have to develop? The first is a General slowdown in global economic growth. Although in 2017, the pace of global growth increased somewhat and look more resilient than in the previous nine years that followed the global economic crisis, but nevertheless, compared with zero years, the growth is still weak» — are her words

The second – absence in the world of the obvious engines of growth, bringing a growing demand for commodities and other traditional Russian exports, said the head of the Central Bank.

«Previously, this role was played by China, but now economic growth in it slowed down and changes its quality is growth through consumption and not exports or investment, and most likely, this growth will be more energy efficient. In this case the supply of energy products increased: developed shale oil and gas, there is global overcapacity in the steel industry, etc. So we can talk not only about the end of oil, but in General about the end of the commodities super cycle,» — said Nabiullina.

The third is the risk of volatility in global financial markets, associated primarily with the US withdrawal, and subsequently the Eurozone from the quantitative easing policy, she said.

The situation in the global economy poses significant challenges for the Russian economy and financial markets, the head of the regulator.

«The slowdown of the global demand for the traditional goods of Russian export limit as growth through exports of these products, and based on revenue from exports of these goods rise demand for the products of the non-tradable sectors, including construction. You need to look for new export opportunities in global markets and global value chains», — said Nabiullina.

Internal calls

There are serious domestic economic challenges, said the head of the Central Bank. Growth potential through the use of existing resources and capacity are limited; unemployment is close to historical lows; enterprise surveys show that capacity utilization is close to the historical maximum.

«Therefore, the main reserves for growth are now improving the efficiency of companies both in the public and in the private sector, reducing costs, improving quality control, productivity growth, investment in new small and medium enterprises and create conditions for their growth,» she said.

Economic growth will require efficient financial institutions. That is why the focus of the policy of the Bank of Russia is forming a healthy, reliable and efficient financial system, able to adequately assess investment projects, to send in their savings and enjoy the confidence of citizens and businesses, said Nabiullina.

To achieve this goal, the Central Bank will continue to work in three directions: cleanse the financial system from a weak and inefficient players; improve regulation and supervision; the removal of barriers and creation of conditions for the development of new financial instruments, increasing financial inclusion and opening up new opportunities for business.

Although the scale of Finance industry is relatively small, its impact will increase, and new technology will be the driver of growth of the financial sector, says the head of the Central Bank.

«The process of transformation of the financial sector will contribute to economic growth through reducing costs for financial institutions, the cost of services for clients and expanding financial inclusion. The process of digital revolution in the financial sector to guide thus, to avoid any unexpected risks to the economy and financial stability,» she concluded.