Demand boost won't help Russia grow - IMF's Lipton

Fri Jun 21, 2013 4:21am EDT
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ST PETERSBURG, Russia, June 21 (Reuters) - Russia's economy needs to grow faster but government attempts to stimulate demand will not succeed in the long run, the International Monetary Fund's first managing director, David Lipton, said on Friday.

"Russia needs faster growth but it's not going to get much faster growth by stimulating demand because there isn't that much slack in the economy," Lipton said at the St Petersburg International Economic Forum.

Lipton weighed into a policy debate in Russia about how to revive flagging growth and stagnant investment, after Finance Minister Anton Siluanov said this week that a weaker rouble exchange rate would boost exports and fiscal revenues.

Calling for better conditions for business to invest, Lipton warned that stimulus might lift growth in the short run but risked causing exchange rate pressures and pushing up inflation in the longer term.