Growth of GDP, Standard of Living Based on Oil Has Run Out - Kudrin
MOSCOW. Feb 2 (Interfax) - Russia has already used up all its oil-sector potential for GDP growth and that of the standard of living for its people, Deputy Prime Minister Alexei Kudrin, who is also the country's finance minister, said.
"Further growth of GDP and living standards based on the oil sector has most likely been expended," Kudrin said at the Troika Dialog forum on Tuesday. "Russia is in a difficult, complicated period (in which it has to) envelope these opportunities in modernization, in the use of oil-sector resources for continued growth," he said.
Average purchasing power among Russia's population has tripled from $4,500 to $15,000 over the past decade, Kudrin said. "This is the greatest rate of per per-capita GDP growth that has accompanied average economic growth rates - 7% per year prior to the crisis," he said.
The average wage in Russia has risen from $100 at the start of this decade to roughly $700, Kudrin said. Wage increases have outstripped increases in worker productivity over the last ten years, he said.
Budget spending has also gone up, including a five-fold increase in healthcare expenditures, Kudrin said. "That has never happened historically, and we'll probably not be able to repeat it," he said. That was a product of an 'oil economy' and high oil prices, he said, noting that oil-extraction had increased 10% in recent years. "We have exhausted the potential for growth, and there will not be such a growth-pace," he said. Russia was living on high oil prices, he said.
In Brazil, India, and China (the other BRIC countries), living standards are substantially lower than in Russia, but economic growth rates are higher, Kudrin said. "We now have to exceed our BRIC colleagues' growth-rate possibilities," he said.
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