Real GDP growth will remain fairly robust, though moderating gradually over the projection period as the impulse from recent terms-of-trade gains diminishes. Growth will continue to be driven mainly by consumption, but investment growth is also expected to be relatively strong. Inflation is likely to decline despite continued rapid money-supply growth, as rising confidence in the rouble contributes to the rapid growth of money demand. However, inflationary pressures are likely to abate only gradually, given the government’s plans for further spending increases in 2007.
Fiscal discipline remains the key to bringing down inflation, while limiting the speed of exchange-rate appreciation. The fiscal easing now underway, which is to continue through 2007, is thus a concern. However, the finance ministry’s efforts to create a more elaborate, rules-based framework for managing the budget and the Stabilisation Fund should improve the prospects for maintaining fiscal discipline over the longer term.
|Population (000s), 2005||142 800|
|Area (000 sq km)||17 098|
|GDP (Billion USD), 2005||762.6|
|Life expectancy at birth (Women, Men), 2004 ||72.3, 58.9|
|Total labour force (000s), 2005||73 811|
|Indicators||% change unless otherwise indicated|
(% of GDP)
|Current account balance (% GDP)||10.7||7.1||4.5|
No. 258/259, December 2006