A table with growth rates of territorial budgets revenues is shown in the RF Federation Council.
Photo: Dmitry Dukhanin
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World Bank Promises Investment Boom, Skyrocketing Prices to Russia
The growth of investments in Russia turned into a boom in early this year, Interfax reported with reference to World Bank. The forecast of the latter is that this year’s growth may hit the record of 17.4 posted in 2000; the inflation will probably stand at 9 percent to 10 percent.
Despite the speedy growth in processing industries, the raw sector and metallurgy still lure the better part of Russia’s and foreign investors, World Bank said. In early this year, Russia’s economy was stepping up on high prices for energy resources, sizeable capital inflow, surge in domestic demand and unusually warm winter. The economy is likely to widen by over 7 percent this year, the bank forecasted. Past year’s growth was 6.7 percent.
But the World Bank forecast for inflation isn’t equally optimistic – from 9 percent to 10 percent by this year’s result. It will be a great achievement if Russia manages to match its target inflation of 8 percent, according to John Litwack, who is the World Bank chief economist in Russia.
Some time earlier, CBR First Deputy Chairman Alexey Ulyukaev blamed accelerated inflation on the government’s companies. The surge in inflation roots in the increase in capital inflow fueled by government’s companies’ borrowing, Ulyukaev said.
Russia’s Finance Minister Alexey Kudrin even warned about the loss of the government’s control over economy. The inflation may hit the annual forecast of 8 percent because of excessive money supply triggered by record inflow of foreign capital, the minister cautioned.
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