 | Â Klaus Rohland, Country Director for Russia, The World Bank |
 Moscow, June 2, 2008 - Russian Economic Reports (RER) No16 is the latest, periodic analysis of Russian economic developments and policies. It is one in a series of economic reports prepared at the Moscow office of the World Bank, which covers pressing macroeconomic and structural challenges facing Russia. "The Russia Economic Report has become a standard feature in Russia's media. It is widely seen as an objective attempt to assess the country's economic state, identifying key trade offs and challenges. As a point of reference for debates on the state of the economy it helps to instigate an informed debate about the choices ahead" said Klaus Rohland, Country Director and Resident Representative of the World Bank in Russia. The RER 16th edition discusses recent economic developments and policies, and includes a special focus on long-term fiscal sustainability and tackling health reform in Russia. The latter two analyses are based on the work carried out by the World Bank as part of its analytical and advisory assistance program to the Russian Federation.   |  Zeljko Bogetic, Lead Economist for Russia, The World Bank |
Russia's short-term economic growth has accelerated above its long term trend, defying weak global conditions. In 2007, the economy grew by 8.1 percent on the heels of high oil prices, robust domestic demand, and strong macroeconomic fundamentals. Preliminary data show even faster real growth in GDP, at 8.7 percent, and industrial production of 6.2 percent for the first quarter of 2008. But inflation is rising, productive capacity is strained, infrastructure constraints are tightening, and real wage increases are outpacing productivity gains. All this suggests that the economy is overheating-that aggregate demand is outpacing long-term productive capacity. Reducing inflation and tackling the remaining structural reforms are the new government's key policy challenges. The Report was launched by Country Director Klaus Rohland, and presented by Lead Economist for Russia Zeljko Bogetic, who led the team of authors of the study, including Sergey Ulatov, Olga Emelyanova, and Karlis Smits. The Report traditionally attracts the media attention, as well as think-tanks and expert communities, not to mention the economic team of the government and various investors. The event is usually well attended by the Russian and international Moscow-based media, and RER 16 was no exception. Overall, the discussion and the Q&A session were substantive, and the media took up the key messages with most questions revolving around the seeming trade off between inflation and development spending, monetary and fiscal policy responses to rising inflation, and structural reforms.
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