For the economy to grow, the energy sector and non-resource-based industries must develop in parallel

18 january 2019 | TVC

The energy sector remains the key sector of the Russian economy, however, no significant growth is expected in this sector. This opinion was expressed by Leonid Grigoriev, Chief Adviser to the Head of the Analytical Center, in "Pravo Golosa" (Right to Vote) TV show, where the participants discussed how Russia could become one of the top five countries with leading economies over the next 5 years.

Leonid Grigoryev
Leonid Grigoryev
Chief Adviser to Head of the Analytical Center

Leonid Grigoriev reminded that in the period from 2009 to 2013 the economy growth rates were extremely low throughout the world. Growth has now stabilized at 3%, which gives about 1 mln barrels of additional oil demand per year. And this situation, according to the expert, will persist for a long time.

"The global economy will never face any drastic ups and downs in the energy consumption. It will be growing by about 1-2% per year globally." – said Leonid Grigoriev. "It should be noted that the developed countries are increasing their GDP with almost no increase in all types of energy consumption.

At the same time, the energy sector remains the key sector of the Russian economy, which forms half of the budget'', – the expert said. "Therefore, we have to invest in the energy sector, but with the understanding that it will not grow significantly, within 1-2%. Besides, we are investing 6% of GDP in the industry development, while the global figure is 1.5%. And we are investing much less in non-energy sectors than the world as a whole," – Grigoriev explained.

In his opinion, the agreement with OPEC, which limits oil production, should have a positive effect on situation in the global and Russian economies. "If the agreement is observed, we will have standard export and income", – said the expert. "Then we will not face the problem of 2015 again, when our income dropped from USD 500 to 350 bln at the same level of physical export. Therefore, we will be able to avoid risks in the oil market, however, there are still some sanction-related risks. We have adapted to the current sanctions, but there may be new ones."

The discussion participants expressed the opinion that sustainable economic growth requires the simultaneous development of both energy sector and non-resource based sectors. In addition, increase in wages, deoffshorization of the economy, funding the real sector of the economy and fixing mortgage rates are required to reduce poverty in the country. This set of measures, according to the experts, should stimulate deferred demand and improve the economy.