Novak sees potential Russian GDP growth exceeding 3% per year

ST. PETERSBURG. June 20 (Interfax) - The potential rate of Russian economic growth exceeds 3% per year, Deputy Prime Minister Alexander Novak said.

This is more optimistic than the estimates for potential growth given by the Central Bank of Russia (CBR) and Economic Development Ministry, which have long argued about this issue. The CBR puts potential growth closer to 2%, while the ministry thinks it is closer to 3%.

"There is a debate over what the potential growth of our economy is. Our economic agencies believe that the potential is equal to about 3% growth per year. The CBR thinks it is somewhat lower, so it is conducting its monetary policy based on its view of potential rates," Novak said at the Sberbank business breakfast at the St. Petersburg International Economic Forum.

"I think that our potential is greater than 3%. Our future depends on how we will introduce modern technologies," he said. It is necessary to tackle two challenges, structural and technological changes in the economy, as well as solve the problem of the labor shortage by increasing productivity, Novak said.

He recalled that the GDP growth forecast for 2025 is 2.5%, but the economy grew by only 1.5% in the first four months of the year, including 1.9% in April.

There are currently many volatile factors affecting economic growth, so the results will need to be tallied at the end of the year, as "a great deal can change in this period," Novak said.