Russia has the lowest inflation in 25 years, in the next year it is expected to be 4%, the Russian Prime Minister Dmitry Medvedev said at the 30th meeting of the Foreign Investment Advisory Council (FIAC).
"We have passed the most difficult period, when our economy was forced to adapt to external shocks, and of course decline of hydrocarbon prices, external pressure, various political restrictions," Medvedev said.
According to Medvedev, the government has done a great anti-crisis work. "We managed to achieve some good results. Now we have the lowest inflation over the whole period a market economy existing in Russia, that is, in 25 years. We anticipate inflation will be about 4% next year, which will definitely create fundamentally new environment for work on the Russian market," TASS cited the prime minister as saying.
The Russian PM added that "the economy is gradually embarking on the growth trajectory," which is weak so far.
Medvedev added that Russia is open for all companies that want to run their business on its territory. "We continue to be open for all desirous to work in our country and run their business here with Russian partners or independently or sell their products and services here," he noted.
The Prime Minister said that the Russian authorities are creating new instruments to attract investors.
Advisor to the CEO of the brokerage house 'Opening-Broker' on macroeconomics, economist Sergey Hestanov, speaking to Vestnik Kavkaza, said that the government's merit in reducing the inflation rate is very small, and, mostly, its strong decline was due to the decline in the purchasing power of the population.
"The level of real incomes declined, and in such circumstances many people are simply unable to purchase goods and services," the expert explained.
At the same time, the economist said that the record-low inflation is useful for the Russian economy for many reasons. "Firstly, it improves the planning, gives confidence to investors, it is much easier for companies to plan their activities, when inflation is quite low. But on the other hand, the low inflation itself will not bring the economy any particular advantages, because low inflation is a necessary but not a sufficient condition of a good economic development," the advisor to the CEO of the brokerage house 'Opening-Broker' on macroeconomics believes.
Speaking about whether we should expect that if inflation reaches 4% next year, the Central Bank of Russia will finally lower its key rate, the expert did not rule out such a decision.
"The fact is, that at present the lending rate is lower than the key rate level. In these conditions, the key rate has almost no effect on borrowing costs. And, accordingly, its decline will not bring any significant shifts in the economy," Sergey Hestanov summed up.
