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. Last Updated: 07/27/2016

Kudrin: Output Will Reach Soviet-Era Levels in 2 Years

Within next two years, Russia's annual economic output will finally reach the level of 1990, Finance Minister Alexei Kudrin told the Federation Council on Monday.

But experts voiced doubts about the relevance of Kudrin's forecast, saying that Soviet-era statistics were hardly comparable with current economic figures because the Soviet economy did not function on market principles.

"In 2007, we will pass the 1990 level and overcome the collapse of the '90s," Kudrin told the upper house of parliament during a discussion of the 2006 budget, Interfax reported.

Over the past five years, Russia's economy has grown at the fastest rate since early 1970s, Kudrin said. Officials say that the gross domestic product rose by 7.1 percent in 2004, reaching 16.78 trillion rubles ($580 billion). It is estimated to grow by 5.8 percent this year.

Debates still rage over whether Russia's economy is more productive today than it was before the Soviet Union collapsed. "It is not possible to compare the Russian economy in 2005 to that of 1990," said Yevgeny Nadorshin, chief economist at Trust investment bank. "You cannot compare things which exist now to those that did not exist back then."

Many of the goods the economy churns out today, such as computers or cell phones, barely existed back in 1990, Nadorshin said.

In contrast to market economies, where prices are determined by supply and demand, in the Soviet Union prices were artificially set by bureaucrats.

One way to put economic output into historical perspective is to compare the volumes of goods, not prices, said Irina Masakova, director of national accounting at the State Statistics Service.

But such a method has pitfalls, Masakova said. For example, the quality of a Lada car produced this year is much higher than that assembled a decade ago, she said.