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Russia’s FinMin: GDP to reach 6.5-7% in next three years

GDP growth will stand at 6.5-7% in Russia in the next three years, Russian Finance Minister Alexei Kudrin told an international economic forum on Wednesday.

“Russia’s GDP growth will reach 6.5-7% in the next three years,” he said adding that the country’s total state debt accounted for 33% of GDP as of late 2007. Kudrin also said that GDP was 7.8% in Russia in 2007, with the country 10th in the world GDP rankings at $1.27 trillion. He also said that Russia ranked seventh place in the world last year for purchasing capacity, ahead of Italy and France. The finance minister said this could be a pretext for integrating Russia, as well as Brazil, India and China into the G8, expanding the group of the world’s eight most industrialized countries to 13-14 members. Kudrin said the Russian economy could become innovative and enter global markets with competitive goods in the next eight years. Russia could also reach the final stage of negotiations on its accession to the World Trade Organization in the next two months, Kudrin said. He added that the country was currently drafting a report on basic terms for joining the 151-member organization. The official reported that the ruble had grown 85% on average against the dollar-euro basket in the past seven years.

The country’s central bank said earlier this month that the ruble appreciated 5.3% in real terms against the dollar-euro in 2007. Kudrin said that the stronger ruble provoked an increase in imports creating competitive risks for Russian companies. However, Russia was currently seeking to balance its imports and exports. The official linked the issues directly to investment growth in the Russian economy, which stood at $249 billion last year and is forecast to double to $490 billion by 2010. “Last year, I afforded to say that we are seeing an investment boom,” Kudrin said referring to an almost 21% increase in domestic and foreign investment against an average of 12% in the past few years. The official also described the forecast of 14% investment growth for 2008 as “conservative.” (