The Russian government can’t seem to agree about the economy there, which means it’s anyone’s guess which way the exchange traded fund (ETF) will go.
Some policymakers say the economy is overheating, citing the 8.1% growth rate, report Darya Korunskaya and Yelena Fabrichnaya for the Guardian. The economy minister said Russia needed still more growth, saying the price of a slowdown was too high.
The debate mostly centers around whether a tax cut is needed to boost growth. Opponents see it as a move that would cost the state budget the equivalent of one year’s defense spending. Both President Vladimir Putin and president-elect Dmitry Medvedev are in favor of the cuts.
Those in favor of the cuts say Russia needs growth of 7%-8% over the next few years if it wants to realize Putin’s goal of doubling the country’s gross domestic product.