External factors will not help the Russian market, growth is possible due to internal sources, Russian Economic Development Minister Maxim Oreshkin said Friday.
MOSCOW (Pakistan Point News / Sputnik - 12th October, 2018) External factors will not help the Russian market, growth is possible due to internal sources, Russian Economic Development Minister Maxim Oreshkin said Friday.
"If we look at this year, the volatility in global markets, of course, affects us, we see volatility in the forex market and in the stock market, and the Russian market should not expect any external support. If there is anything positive on the Russian market, it will be associated only with the success of our development within the country. Therefore, when implementing the country's economic policies, the authorities should rely on internal sources of growth only," Oreshkin told the Rossiya 24 broadcaster.
The Bank of Russia expects the country's GDP growth at 1.5-2 percent this year, 1.2-1.7 percent next year and 1.8-2.3 percent in 2020.
The negative situation on the US market may turn out to be a long-term trend, Oreshkin noted, adding that short-term and long-term volatility on the global market is natural, and small price fluctuations should not be ignored.
"For the United States, this is definitely not a temporary story: it sees the recovery cycle that began in 2009 now coming to an end, its unemployment has dropped to record lows, which means that the pace of its economy growth can not continue any longer," the minister said.
In such conditions, the Federal Reserve will raise interest rates, he explained.
"And, as we see, now for the first time in many years, the [US] president directly comments on the Federal Reserve in a negative tone, which, of course, causes great concern in terms of the sustainability of this important institution for the US economy," Oreshkin said.
Earlier in the week, US President Donald Trump blamed the Fed's monetary policy for stock market correction.
Oreshkin is confident that Trump's criticism toward the Fed was absolutely unjustified.
"Everything that the Federal Reserve does is aimed at maintaining stability. Obviously, due to low interest rates, the economy can recover from the crisis, but it cannot grow in the long term. Therefore, interest rates are normalizing now, they are reaching the levels which should be," he explained.
Last month, the Federal Reserve boosted the US interest rate for the third time this year by 25 basis points and is planning for two more hikes before 2019. The central bank's open market committee said the goal of the increases is to control inflation as economic activity continues to grow at a strong rate.
