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Real GDP growth is projected to moderate in 2005-2006. The consumption boom will continue, thanks to fiscal loosening in 2005. With export growth slowing and consumption driving import growth, the negative contribution of net exports will grow. Nevertheless, the current account surplus is expected to remain fairly large, thanks mainly to high oil prices.
The central bank continues to try bringing inflation down while preventing an overly rapid appreciation of the real exchange rate. Inflation has accelerated somewhat and will most likely stay above the authorities’ 8-10% target range for 2005.The budget remains in surplus despite fiscal easing, thanks chiefly to revenues from high oil prices. Structural reforms appear to have stalled in 2004. The central bank has continued work on implementing reforms in the banking sector, but progress is proving difficult. Electricity reform has slowed markedly, and there is no sign of progress in gas-sector reform. The long-awaited liberalisation of the market in Gazprom shares is now in prospect, but the implications of Gazprom’s acquisition of the state-owned oil company Rosneft are mixed at best.
|Population (000s), 2003||143 600|
|Area (000 sq km)||17 075|
|GDP (Billion USD), 2003||433.5|
|Life expectancy at birth (Women, Men), 2002 ||72.9, 62.3|
|Total labour force (000s), 2003||73 800|
|Indicators||% change unless otherwise indicated|
|Fiscal balance (% of GDP)||3.5||2.0||1.5|
|Primary fiscal balance (% of GDP)||6.0||5.0||4.5|
|Current account balance(% of GDP)||10.2||11.1||6.8|
© OECD Observer
No 245, November 2004