Russian Economic Report No 25 (Securing Stability and Growth)

Russia has seen even higher oil windfall in the past few months, which translates into likely fiscal surpluses this year and next. The government should not miss the opportunity provided by a large oil windfall to substantially improve its long term fiscal position, further reduce inflation, and, therefore, ensure a strong basis for durable stability and healthy growth in the future. Rising domestic demand and credit activity are increasingly supporting solid growth. As a result, we maintain the growth outlook for Russia at 4,4 percent in 2011 and 4,0 percent in 2012, closer to the post crisis long term potential growth. Overall, labor market conditions improved recently while poverty was broadly flat during and after the crisis, but unemployment and poverty in many regions remain difficult. Further reductions in poverty will require greater policy focus and persistence in implementing more effective and targeted programs, especially in the poorest regions.