Antonik: Russia’s growth prospects – is there anything to worry about?

ABSTRACT:

The increase in energy commodity prices accompanied with increasing oil production resulted in the impressive acceleration of Russia’s economic growth in 2000s. On the one hand, the steady flow of foreign funds enabled the improvement of the financial condition of mining companies, on the other, by the increase in budget revenues restored stability in the public sector. Fruits of economic growth were also transferred to the society in the form of rising wages in the public sector and increased social spending. However monocultural economy and a strong dependence on the situation on world commodity markets pose a threat to the Russian economy. The objective of this paper is to shed some light on the problems that will influence Russian economy in coming years. This paper examines three of them: the country’s dependence on oil revenues, unfavorable demographic trends and budget tension arising from oil revenues dependency and rising social cost.

 

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