The main problems of the Russian economy

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Alexey Madridfoto: Dmitry Dukhanin / Kommersant

The head of audit chamber and former Finance Minister Alexei Kudrin questioned that economic growth by 2018 will exceed one percent of GDP. This opinion he expressed in his speech in the State Duma, reports TASS.

The main reasons for the deceleration of the Russian economy, Kudrin said the increase in value added tax (VAT), the transition to the new housing system, and the potential tightening of sanctions against Russia, which only increased the pressure on the economy in August 2018.

“We can get the result of a combination of these factors, the economic growth rate next year of about one percent or less of a percent,” — said the chief auditor of the country.

Another problem that will slow down economic growth is the situation on the domestic gasoline market, where prices continue to rise even after the agreement between oil companies and the state. “I agree that the transfer rate on the prices and the VAT increase, and higher excise taxes on gasoline, and the risk of rising gasoline prices affect the valuation of the Central Bank,” said Kudrin, noting that these same factors are at risk to hit on the real income of the population.

The former head of the Ministry of Finance admitted that initially, the authorities expected growth of real incomes of the population by 2018, but now the forecasts say that growth is either not at all or the income will fall again. The negative trend in real income was recorded in autumn at the end of September revenues slipped 1.5 percent.

Video, photo All from Russia.

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