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Russian government is too deep in the economy

Russia’s future growth prospects look good but concerns remain about a slowdown in economic reform – that’s the belief of the European Bank for Reconstruction and Development.

The Bank's forecast for Russia's economic growth this year is in line with the government's – around 7%. And it predicts 6.5% growth for 2008.

The EBRD's Chief Economist told RT that Russia's government needs to reduce its role in the economy for the growth to continue.

“Our major concern is to get clear about the role of the state. Russia has achieved a lot in terms of developing its private sector – very healthy growth across the country and in all parts of the economy. What's important now is to make sure that the government sets clear rules and also the government needs to continue reforms. A lot of the issues facing the government now are about changing itself, rather than changing the economy,” said Erik Berglof, chief economist at EBRD.

Its latest report says Russia has been less affected by ongoing global market volatility than other CIS countries, largely due to the strength of its financial institutions.