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No deep economic crisis occurs in Russia — Putin

June 19, 2015, 14:56 UTC+3
Russian President Vladimir Putin believes that the trouble-shooting measures against the crisis have worked by and large and now systemic development can begin
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Russian President Vladimir Putin at a plenary session of the St. Petersburg International Economic Forum

Russian President Vladimir Putin at a plenary session of the St. Petersburg International Economic Forum

© Mikhail Metzel/TASS

ST. PETERSBURG, June 19. /TASS/. There was no deep crisis in the Russian economy, the country is going through hard times, Russian President Vladimir Putin said on Friday at the St. Petersburg International Economic Forum.

"At the end of last year, a deep crisis was forecasted to us. This did not happen. On the contrary, we have stabilized the situation, diminished negative market fluctuations and are confidently going through obstacle course mostly because Russia’s economy has accumulated sufficient supply of inner strength," Putin said.

Speaking about energy prices in the world which greatly affect the Russian economy, the Russian president reminded that average price for Urals blend had fallen from $107.9 per barrel in 2013 to $56 per barrel in 2015. "According to Rosstat [Russian state statistics agency] estimates, Russia’s GDP has fallen by 2.2% in the first quarter of 2015 comparing to the same period last year. Industrial production fell in January-April by 1.5%," the Russian leader noted.

Though Russia has limited access to global capital market and consumer demand has fallen, Russia maintains positive trade balance and growing volumes of non-oil export, Putin said. "In the first quarter of 2015, physical volume of non-energy export has grown by 17%," Putin noted.

Troubleshooting measures against the crisis have worked

Russian President Vladimir Putin believes that the trouble-shooting measures against the crisis have worked by and large and now systemic development can begin.

"The promptly taken measures to support the economy and the financial system have certainly worked. Now we are again focusing on the systemic tasks and the long-term development agenda," Putin said.

Now the task is to ensure "sustainable growth, greater effectiveness of the economy, labour productivity and an influx of investment."

"Our priorities are to improve the business environment, train personnel for the economy and state governance, education and technologies," Putin said.

Financial and banking systems of Russia became adapted to new conditions

Russia’s federal budget deficit will total 3.7% at 2015 year-end, President Vladimir Putin said on Friday at the plenary session of the St. Petersburg International Economic Forum (SPIEF).

"The deficit of the federal budget in January - May 2015 totaled 1.048 trillion rubles ($19.2 bln) or 3.6% of GDP. It is expected that the deficit at year-end will equal 3.7%," the head of state said.

Financial and banking systems of Russia became adapted to new conditions and the currency rate was managed to be stabilized, the Russian president said.

"I would like to stress at the same time we did not resort to any measures limiting the free capital flow, just like in 2008-2009," Putin said.

Gold and currency reserves amount to more than $300 bln, the president said. "I have just talked with Elvira Nabiullina [head of the Bank of Russia]: $360.6 bln were at June 1 and slightly less now because these funds were used," the head of state said.

The Reserve Fund totaled $76.25 bln and the National Wealth Fund equaled $75.86 bln as of June 1, 2015, the president said.

Russia’s inflation on downside trend

Russia has kept control over inflation, which is decreasing, Russian President said at a plenary session of the St. Petersburg International Economic Forum.

"We have kept control over inflation. Yes, it jumped due to the ruble’s devaluation but now this trend is losing ground," the head of state said.

After consumer prices jumped in the first three months of this year, inflation is now decreasing. It equaled 1.2% in March and 0.5% in April, Putin said.

"The trend is obvious. We see a downside trend," the Russian president said.

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