MOSCOW, March 2< /strong> Inflationary processes in Japan may lead to a reduction in the country’s GDP in purchasing power parity (PPP) terms in the next two years, which will help Russia quickly overtake it and enter the top 4 economies in the world, but this requires significant investments, commented the managing director NRA rating service Sergey Grishunin.
Earlier this week, Russian President Vladimir Putin, announcing a message to the Federal Assembly, said that in the near future Russia will become one of the four largest economies in the world. He noted that such development should directly translate into increased incomes for citizens' families. According to World Bank data, China will become the world's largest economy by purchasing power parity in 2022. The United States was in second place, India was in third, and Japan was in fourth place. Russia rounded out the top five countries, and Germany remained in sixth place.
“To overtake Japan, we need growth of our economy of more than 4% over 10 years and growth of the Japanese economy no faster than 1.5% per year. However, inflationary processes in Japan may lead to a decrease in its GDP according to PPP within the next two years, and then Russia will be able to quickly catch up with Japan. At the same time, this requires significant investments from the Russian authorities — both public and private,» Grishunin said.
He noted that these investments should not greatly accelerate inflation, but this would be “very difficult to achieve in a practically open economy.”
In addition, we should not forget about countries occupying lower positions in terms of PPP. This is Germany, whose growth is hard to believe, as well as Indonesia and Brazil, which can “significantly increase the pace due to the demographic dividend,” the expert noted.
«Nevertheless, fifth place in the world after all the disturbances, reforms and sanctions is a very high result, but the task has been set, so all that remains is to work harder,» concluded Grishunin.