All news

How cabinet worked in 2021 and why EU faced energy crisis: Putin tackles economy

Speaking about the energy crisis in Europe, the Russian President said that the European counties mainly created the crisis themselves when they decided to abandon long-term contracts and switch to spot market purchases

MOSCOW, December 23. /TASS/. The results of the work of the government and the Bank of Russia deserve praise in 2021, President Vladimir Putin said at the annual press conference on Thursday.

Speaking about inflation, which reached 8% in Russia this year, Putin recalled that in the United States inflation has exceeded its target by three times.

Touching upon the rise of the key rate by the Bank of Russia, the President said that without this measure the situation in the country could be "like in Turkey," where the Turkish lira went into a steep dive.

Speaking about the energy crisis in Europe, the Russian President said that the European counties mainly created the crisis themselves when they decided to abandon long-term contracts and switch to spot market purchases.

"There you go, you’ve made your bed now lie in it," Putin said.

Here are the main statements on economic topics the President made during his annual press conference.

On economy amid pandemic

"Our economy, faced with the challenges of coronavirus infection, necessary, forced restrictions in this regard in the economy, and in social areas, despite all the challenges, turned out to be more flexible and ready for these shocks than many other developed world economies."

"Even if you were to take the top twenty (of the world’s leading economies - TASS), our economic decline was 3%, which is much lower than in many leading economies in the world."

On supporting businesses and citizens

"People are sympathetic and generally positive about the government's work and efforts to support business. By the way, the result is not bad either."

"Even amid the pandemic when we supported the sectors of economy that were hit most of all, those were still huge amounts - 4.5% of GDP last year and almost 1% of GDP this year, which makes almost 5.5% of GDP."

On government’s work in 2021

"In general, I believe that the activities both of the government and the Bank of Russia deserve praise. The results are positive."

The President added that the real income of Russian citizens will grow by 3.5% on average this year, while GDP growth is expected to be 4.5%.

"Construction demonstrated very good, record results of 90 mln square meters for the first time in Russia’s modern history," he said.

On raising key rate

"I know that the real sector is not satisfied with the increase in rates, but without it we could have a situation similar to that in Turkey <…> This instrument should be used cautiously, but the Central Bank is independent in pursuing its policy. You may consider it strange but I do not interfere in the work of the Central Bank, though I assess it positively."

On inflation

"If we take the world’s leading economy - the United States, they already have inflation at 6.2%, as far as I know, while the target indicator is 2%. That means that their inflation is three times higher than their target indicator. Our inflation is also high it is 8%. Our target was 4%, so it is double the target indicator, yet they have it three times as high. That is a serious issue. I think that the Federal Reserve will have to do something about it.".

In Russia, the authorities will have to adjust pensions to the level above the level of inflation, Putin said. According to him, there is a need to think about fulfilling the promises given to the country’s citizens

On energy crisis in Europe

"I want to reiterate that we’ve said that there’s no reason to get rid of long-term contracts, but the European Commission kept telling us that the market was needed and that the market would decide, so now the market has decided $2,000 and higher per thousand cubic meters, there you go, you’ve made your bed now lie in it."

"They (Europeans - TASS) shouldn’t think that they are so smart and assume that God is not watching them. The problems they created for themselves should be solved by them alone. And we are ready to help them. We are doing this."

Putin recalled that Gazprom supplies the entire volume of gas under its existing export contracts.

"And not only the entire volume, but it has also increased the supply, I think, by almost 12%, or by 20%, about 20% already to the far abroad, and increased supplies to Europe as a whole. As far as I know, it is the only global company that has done this."

On world’s leading economy

"In terms of purchasing power parity, the Chinese economy is already bigger than the US one. Come 2035, then 2050, China will inevitably become the leading economy in the world in all other indicators as well," the Russian leader noted.

According to the president, the US understands this and seeks to exert pressure on China through sport, calling it "a mistake".