Russian economy adapted to new reality

Russian economy has mainly adapted to the new macroeconomic conditions and there are signs of recovery, Economic Development Minister Alexei Ulyukayev said Thursday.

"The economic figures were not strongly affected by another oil shock, and devaluation was less than before," Ulyukayev said, adding that inflation was decreasing.

In his view, it means that economy has adapted to the limited global demand for Russia's main export products and its limited access to international capital markets.

Ulyukayev said that the decline of gross domestic product (GDP) slowed down to 1.4 percent in the first quarter, with only a 0.6-percent decline in industrial production, while inflation rate was down to 7.2 percent in April in comparison with 12.9 a year ago.

He predicted that the country's GDP decline would further slow down to 0.2 percent this year. He also forecast a 0.8-percent growth next year and a growth of 2.2 percent in 2019.

Higher growth rate is possible in case of more active investment policy and a change in investment growth model, said Ulyukayev, who forecast an optimistic target of average oil price for 2016-2019 at 40 U.S. dollars per barrel.

The minister called for promotion of non-oil exports, innovation and human capital development, as well as more support for small and medium-sized businesses.

Russian economy has been suffering from a downturn amid slumping oil prices and crippling Western sanctions, which were imposed to punish Moscow's alleged role in the crisis in Ukraine.