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Russia among world leaders in pace of economic growth - Gref (Part 3)(Interfax News Agency Via Thomson Dialog NewsEdge) KAZAN. May 20 (Interfax) - The pace of economic growth has been at an average of 6.8% of GDP in Russia in the past seven years, Economic Development and Trade Minister German Gref said on Sunday. Gref spoke in Kazan during the presentation of the Russian Federation at an annual meeting of the European Bank for Reconstruction and Development's Board of Governors. "Undoubtedly, Russia has been among the world's leaders in the pace of economic growth in the past six-seven years. The average rate of economic growth has been at 6.8% of GDP. We have thus asserted our right to be a world leader in terms of pace of economic growth," Gref said. Only China and India have been ahead of Russia in the past seven years, he said. "Importantly, due to intensive development in the past three years, Russia overcame the economic decline of the 1990s completely in 2006 - a very serious decline which could be likened to a fall into a deep abyss. While other countries managed to nearly double their GDP, Russia lost 40% of its GDP," the minister said. "When we are talking about the restoration of GDP, we mean that it has been totally restructured. We went through a very serious crisis in the 1990s. But today the quality of the Russian economy is totally different. It is an economy based on market principles and on theprinciple of demand and supply. Perhaps this is our main achievement for today," Gref said. The model of economic growth has noticeably changed, he went on to say. "Whereas until 2004 and largely 2005 the growth model was based on an accelerated extraction of natural resources, primarily hydrocarbons, in recent years the structure and sources of growth have absolutely changed. Exports, including the exports of hydrocarbons, have ceased to be the main motive force of economic development, being supplanted by investment demand and the end household demand," Gref said. This is due to the fact that citizens' real incomes have doubled over the past six years, and their foreign-currency incomes have grown fourfold , he said. "We have also been witnessing an investment boom, primarily in the processing sector. Last year, the pace of economic growth was at 6.9 percentage points and slightly over 1.5% in the processing sector, which means that the structure of economic growth has become far sounder than it was in the early 2000s,"the minister said. "The very rigorous financial-budget policy we've been pursuing in recent years has had its positive effect. We have a very stable macroeconomic situation, as well as a stable ratio between the debt and GDP. Besides attaining a trade and payment balance surplus, and forming a significant gold and foreign currency reserve, which allow us to hedge foreign currency exchange rate risks, we have been pursuing a budget surplus policy and will do so until 2010, inclusive," Gref said. "Against a backdrop of stable macroeconomic indices we've been witnessing growth in nearly all sectors," he said. Gref made special mention of the growth rate reported in machine building, which topped 15 percentage points in the first quarter, and also the financial sector. sd Copyright 2007 Interfax News Agency , Source: The Financial Times Limited |