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  • Elvira Nabiullina, Governor of the Central Bank of Russia

Elvira Nabiullina: Economic growth results from greater economic efficiency

In an interview with Rossiya-24, Elvira Nabiullina, Governor of the Central Bank of Russia, spoke on the main topics of discussion in Washington D.C. at the Annual Meeting of the Board of Governors of the IMF and the World Bank Group as well as at the G20 Finance Ministers' and Central Bank Governors' Meeting.

She said the current global economic situation was the main issue discussed. Generally, the experts agreed that the economy is recovering but very slowly, and that it is still fragile. Also, there is a great concern about unemployment rates and the sovereign debt in the developed countries that remain high.

With respect to the developing countries, everyone is concerned about the potential consequences of abandoning the soft monetary policy. This policy has had certain negative effects. For instance, there is a high risk of economic bubbles, volatile capital inflow and outflow and respective currency exchange rate changes.

Specifically, Ms. Nabiullina said that when these issues were discussed at the G20 Finance Ministers' and Central Bank Governors' Meeting last summer in Moscow, the United States' plans to start decreasing asset sales within a quantitative easing policy this fall received strong criticism. Opponents expressed concerns about the consequences for the global economy and the risks of an early withdrawal from the quantitative easing program.

"This time in Washington, attention was strongly focused on the consequences of a longer QE3, which could in fact lead to more economic bubbles and other system-wide risks," the Central Bank Governor stressed. "Of course, it is a complicated issue. Withdrawing too soon could be just as adverse as withdrawing too late. In any case, it is obvious - and all the participants mentioned this - that as the economy grows and recovers, the country should go back to more traditional monetary policy measures."

Referring to the Russian economy, Elvira Nabiullina noted that the growth rate is decreasing and could fall to 2% next year, as suggested by the Russian Central Bank.

"We don't need high short term growth rates. We need steady and consistent growth that is mainly the result of greater efficiency, higher productivity and economic diversity. This is the main objective of the Central Bank's monetary policy," she said.

Full video version of the interview you can find here (only Russian version)