Russian economy: Challenges and scenarios of volatile future

The model of domestic economy and financial system as a starting point for scenario forecasting and development of macroeconomic strategies on the horizon of 2017-2025 is disclosed. The analysis of the basic features of this model as “Latin American†is given: overconcentration of ownership; resource-based economy; dependence on world oil, natural gas and metal prices; excessive administrative costs and heavy taxes; very high volatility and risks; maximum offshoring; shortage of FDI; weak financial development; distortions in credit supply, interest rates and RUB / USD exchange rates; speculative financial markets dependent on carry traders. We provide the analysis of current economic and financial policies, which limit growth and technological modernization. The drivers that stabilized the economy in 2014-2017 are explained. The forecast of changes in the economic situation in Russia, macroeconomic and financial policies in 2017-2019 is given, depending on changes in world prices for oil and other natural resources (five probabilistic scenarios). The international and domestic macro risks are revealed in the next 10 to 15 years. Four probabilistic scenarios of the economic future for the period until 2025 are presented: “Tsunami†, “Frozen Economy†, “Controled Cold†, “New Deal†. The “New Deal†policy formula aimed at creating conditions in Russia for ultra-fast economic growth, accelerated technological modernization, improving quality of life and life expectancy is detailed. The key ideas of credit, monetary, currency rate, tax, budgetary, price, regulatory and investment policies, as well as policies in the field of structural reforms and development of regions are presented. This article gives KPI of the New Deal. The article explains the basic theoretical ideas («rational liberal-ism») underlying the new economic policy.