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Tuesday, 14 May, 2002, 17:36 GMT 18:36 UK
Trade chief warns over Putin demands
Oil workers
Russia is the world's second largest crude oil exporter
Russia's trade chief has slapped down President Vladimir Putin over accusations of limited economic ambition, warning that faster growth was "impossible".

Mr Putin, in a state-of the-nation address, scolded the government for being slow to spur economic recovery, and to strip away the bureaucracy he blamed for undermining Russian prosperity.

But German Gref, economic development and trade minister, said that faster growth was "impossible" to achieve.

"It is unrealistic during economic restructuring to obtain very high growth rates," Mr Gref said.

"In the short and medium term it is impossible. May God allow us to achieve what we have currently got planned."

Oil effect

The government has said that Russian economic output could grow by 4.4% next year, 5.4% in 2004 and 5.6% in 2005.

But these rates, while higher than those achieved by most Western nations, are lower than those demanded by Mr Putin's office.

Economic aide Andrei Illarionov has said that Russia's economy needs to expand by 8% a year to catch up even with Portugal's, one of the poorer EU nations.

A weak oil market could also threaten the government forecasts, which assume an oil price of $21.5 a barrel next year $22 a barrel in 2004 and $22.5 in 2005.

Russia is the world's second largest oil exporter.

If the oil price fell to $18.5 a barrel, Russia's dependence on oil would see economic growth fall back to 3.4% next year.

"I would very much like to revise forecasts to 8-10%, but we must not set unrealistic goals," Mr Gref said.

"We think this plan is hard to meet as it is, and there is no way to seriously speed up growth rates."

Russian economic output grew by 9% last year, a figure flattered by the low base from which the economy started, economists have said.

See also:

20 Mar 02 | Business
Russia tightens central bank control
19 Feb 02 | Business
Russian guru upbeat on economy
11 Feb 02 | Business
Russia hints at oil production rise
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