June 16, 2014 09:19
Current economic situation in Russia not stagflation - minister
MOSCOW. June 16 (Interfax) - The current economic situation in Russia cannot be characterized as stagflation, Economic Development Minister Alexei Ulyukayev said last week at a presentation of his book on the transformation of the global economy.
"I believe that the current situation cannot be called stagflation. It's not a matter of absolute figures, but dynamics. Stagflation is an economy that did not have high inflation and did not have low rates of economic growth, but for some reason entered this zone. This, for example, was the case with the American and European economies 40 years ago. They had low inflation, it became high inflation, there was strong growth, it became weak growth. For us, inflation of 6-7% is not high. That is, actually it is high, but it was preceded by even higher inflation. Therefore, this is a movement in the economy where growth is slowing and inflation is decreasing, not increasing. This is some new special phenomenon that is in some ways similar to what happens and in some ways a completely new economic reality," Ulyukayev said.
"I believe that in general these manipulations with terms aren't very useful," he added.
"The same as in the conversation about recessions - two consecutive quarters [of contraction] or not two consecutive quarters. Does two quarters less one day count or not? Well, we're falling into an excessive formalism here. But in any case, based on how I understand this, I believe that we don't have stagflation," Ulyukayev said.
He said risks that inflation will accelerate while economic growth remains weak "probably exist, but [they are] low."
"Our inflation will probably go down and will quite certainly go down," Ulyukayev said.
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