The Russian economy turned out to be more flexible and ready for pandemic shocks than many other countries when it came to the coronavirus pandemic, Russian President Vladimir Putin said at his annual press conference on Thursday.
"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 challengers turned out to be more flexible and ready for these shocks than many other developed world economies," Putin said, adding that he will talk more about this later on the press conference.
Putin explained that we are talking about the first five to ten leading economies in the world. "And even if you were to take the top twenty," President Putin added.
"Our economic decline rate was 3%, which is much lower than in many leading economies in the world." And Russia recovered from these shocks much faster than other countries, the President stressed.
"Even last year we could already talk about these tendencies," he said. "Naturally, I took the graphs with me, and I’ll tell you about it now," Putin promised, moving on to specific figures that relate to the situation in the economy.
Putin noted that Russia's external debt dropped 4%, while international reserves jumped from $595 billion to $625.5 billion.
According to Putin, in the first 10 months of 2021 - from January through October - Russia’s GDP increased by 4.6%, with an expected annual rate of 4.5%.
"GDP growth of 4.5% is expected this year. Now it reaches 4.6% through October," he said.
He also cited other figures regarding the situation in the economy. Thus, industrial production is growing at a rate of 5%, processing - 5.2%.
"Our grain harvest is slightly lower than last year, due to weather conditions. It was 133.5 [mln tonnes], now it reaches 123 [mln tonnes]. But this is a very good result, which will give us the opportunity not only to provide for ourselves, but it will also preserve our very significant export potential," the president said.
At the same time, investments in fixed assets amounted to 7.6% as of November. "In general, 6% is expected for the year. There was a decline of 1.4% last year," Putin said.
Housing construction in Russia reached a record level of 90 mln square meters this year, President Putin said. "Construction demonstrated very good, record results of 90 mln square meters for the first in Russia’s modern history," he said.
President also noted what was reached in other areas, saying that "the average monthly wages started growing in real terms," and there were "changes in real disposable income of citizens," with growth expected this year.
"Inflation of 8% is expected," Putin added.
According to the head of state, life expectancy in Russia has decreased to 70.1 years, which is linked to the pandemic. "There are things that are of great concern to us, which is life expectancy. It has slightly decreased, it was 71.5 years last year, and now it became 70.1 years. And this is just one of the negative the consequences of the coronavirus pandemic, " President Putin said.
He added that raising labor productivity is also an important issue for Russia. "There is a whole set here starting with education, digitalization, and ending with the same healthcare. A whole set of programs, we have almost all of them laid out, we know what needs to be done, the resources to work in this direction are provided and allocated rather quickly. We have them. It is only important to organize this work competently and achieve the maximum return on each ruble invested in solving these problems," the President said.
Putin believes that without the Russian Central Bank’s key rate hike, the situation in the country could be "like in Turkey." "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," he said, adding that "it is a serious issue, a serious challenge." "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," Putin noted.
The Turkish lira has seen a collapse, falling almost one-third against the dollar compared with the beginning of the year in just November. Experts consider it to be the result of the policy of the country’s Central Bank, which is believed to continue reducing the interest rate under pressure from the authorities. In particular, last week it cut one of the key rates at weekly repo auctions from 15% to 14%.
