Connect with us

RussiaFeed

News

Economics Ministry provides President Putin with favourable economics report

Alexander Mercouris

Published

on

0 Views

President Putin has one of his regular meetings with the members of his government in his office in the Kremlin on 11th September 2017.  During that meeting he received a detailed report on the state of the economy from Economics Minister Maxim Oreshkin.

Briefly, Oreshkin reported that against a background of lower than expected inflation (currently running at an annual rate of just over 3.1%, well below the Central Bank’s 4% target) investment and lending activity are increasing, setting the scene for higher growth both this year and in the years are coming.

Oreshkin’s report to Putin, delivered verbally with a transcript published by the Kremlin’s website, is provided below

Actually, we had several not very good years economically, which explains a somewhat pessimistic view of our economy. At the beginning of the year, experts did not expect GDP to grow by more than 1 percent. We can say with confidence now that these pessimistic forecasts have not materialised. We [at the Ministry] believed early this year that the economy would grow by over 2 percent and that inflation would fall below the 4 percent target. The current dynamics show that our assessments were a bit pessimistic as well.

Economic growth accelerated in the second quarter to 2.5 percent, while inflation was 3.2 percent at the beginning of last week.

Investment activity was even higher than we expected: according to available data, it reached 6.3 percent at the end of the second quarter. It is very positive news, because investment projects that are implemented today will boost economic growth tomorrow.

Following a minor technical slowdown in July, we expect a new wave of positive news and accelerated economic growth in the next few months.

What is the reason for this? First and foremost, we are entering a long cycle of lending activity in the banking sector. Inflation has stabilised at a low level, and the debt burden on people and companies has decreased over the past few years. Taken together, this created the grounds for a lending cycle that will last many years. When the inflation rate went down to 3.2 percent, it was a signal for the Bank of Russia to reduce interest rates. The goal is, as you know, to maintain inflation at around 4 percent. The Bank of Russia has announced its plans to reduce the interest rate at its meeting on Friday.

If we look at what happened within the banking system over a period of the past month, we will see that our largest banks dramatically reduced mortgage rates. They have cut the basic rate to less than 10 percent, which has increased housing affordability in Russian cities to the highest level so far. In this situation, we expect a record high volume of mortgage contracts this autumn and winter. This will bolster the construction industry and the production of construction materials in the sectors that have idling capacities.

Retail lending is gathering momentum. The important feature that distinguishes the current cycle from the previous one is that our banks are focusing on low-risk lending products, for example, those that are connected to payroll programmes. Therefore, we can expect sustainable dynamics here too.

And lastly, corporate lending. Dynamics in this sector have reached positive figures as well, which is propping up the investment activity.

Secondly, we expect the consumer demand to resurge. In addition to the reviving lending activity, which I have mentioned, salaries have started growing as well. This year alone, real wages can grow by over 3 percent, and next year we expect them to grow by some 4 percent, including due to rising wages in the public sector.

Of course, we will need several years to make up for people’s losses in 2014 and 2015, but the crucial thing is that this nascent income growth is not based on oil prices but on the active growth of labour efficiency. We expect it to grow 2 percent; last year we only reported a symbolic growth of 0.1 percent.

Considering the record low unemployment level, which we expect to drop to 4.7 percent in three years, as well as the unfavourable demography, the growth of labour efficiency will be our key to maintaining economic growth and individual incomes.

The third target is the further growth of investment activity. In this context, we must continue working to make conditions for Russian business more predictable. We are moving towards this goal thanks to changes in the macroeconomic policy, which we introduced in the past few years. These include inflation targeting by the Bank of Russia, which has helped us reduce inflation to a record low, a responsible budget policy and the introduction of a new mechanism for moderating the influence of oil prices on the national economy.

It is important that predictability is also growing at the micro level. We have launched a reform of the regulatory system, which is becoming more predictable and, most importantly, is focused on prevention rather than penalty.

Mr President, the decisions you made public at a recent meeting at the Nizhne-Bureiskaya HPP are a major element for reducing administrative pressure.

Another major component of predictability is tariff regulation. This year we continued our indexation policy that includes adjusting prices to inflation targeting. We will soon prepare proposals for transitioning to long-term price formation, so that infrastructure companies and business in general will know that prices will not change for a maximally long period of time. This issue was also discussed at a meeting in Vladivostok.

An important task in the context of the economic policy is active support of tools for investment financing. We have support programmes that are actively developing, primarily investment lending programmes. The programme Six and a Half is in effect for small and medium-sized businesses. Work is underway to launch the “factory of project financing,” which will support projects worth three billion rubles and up.

I would like to particularly thank the Bank of Russia, which has actively supported this programme’s development. Lower reserve and capital requirements will be applied to banks for the loans issued under this programme. The first loans are expected to be granted in the first quarter of 2018.

It is very important that we have organised the work under both programmes in such a way that allows for adopting a decision on granting a loan without any officials involved.

Of course, an important element for the growth of investment activity is a programme for infrastructure mortgages. I will brief you on its preparation soon. As a result of these programmes and their outcome, we expect active investment growth at 5–6 percent per year during the forecasted period.

It is clear that economic growth largely depends on the Government’s priority projects. As regards the maximum effect on GDP growth, I would like to note a project for creating conditions for active growth of non-resource exports, as well as a recently approved project for increasing labour efficiency. Under the latter, we aim for active cooperation with our Japanese partners, with a corresponding agreement signed at the Eastern Economic Forum.

Due to the 2.1 percent GDP increase this year, in the next three years we expect sustainable growth of the national economy of at least two percent, a stable inflation rate at four percent, and household income recovery. During this three-year period, real wages should increase by about 10 percent.

An increase in wages is extremely important because it allows us to attract and retain the best talent in the country. In today’s global economy, victory in competition goes to those who can, on the one hand, help their people fulfil their potential, and on the other hand, be the most attractive place to live and work to attract the best talent.

There is still a difference between the basic and the desired scenario. The basic forecast gives us 2.3-percent economic growth while the desired growth is 3.1 percent. Therefore, the Government continues to develop and gradually implement more changes to promote economic growth at a rate higher than the global average. First, in addition to the programmes mentioned here today, I am talking about the digital economy programme, increasing the competitiveness of Russian cities and a number of other projects. I also want to note that the basic scenario so far includes the conservative effect of the measures that were implemented only recently.

This concludes my report.

As is clear from Oreshkin’s report – and as has indeed been repeatedly said by Russian officials from Putin down – the Russian economy is in a period of transition, moving from the high inflation high wage growth environment which characterised the post 1990s recovery period up to 2012, to a low inflation high investment environment, which is expected to power Russian economic growth after 2020.  In keeping with previous forecasts, Oreshkin anticipates that Russia will have completed this transition within three years ie. by 2020.  Though his report wisely says nothing about what he expects to happen after 2020, it is quite clear that he expects the economy’s growth rate after 2020 to increase.

Note that Oreshkin anticipates active investment growth of 5-6% per year during the three year period leading up to 2020, as against real wage growth of just 10% over the whole of this three year period.

In other words Oreshkin expects investment to grow faster than wages, increasing the economy’s productivity and competitiveness, though as Russia shifts towards a pre-election period he is careful not to say this.

Liked it? Take a second to support The Duran on Patreon!
Advertisement
Click to comment

Leave a Reply

avatar
  Subscribe  
Notify of

Latest

Don’t Laugh : It’s Giving Putin What He Wants

The fact of the matter is that humorous lampooning of western establishment Russia narratives writes itself.

Caitlin Johnstone

Published

on

Authored by Caitlin Johnstone:


The BBC has published an article titled “How Putin’s Russia turned humour into a weapon” about the Kremlin’s latest addition to its horrifying deadly hybrid warfare arsenal: comedy.

The article is authored by Olga Robinson, whom the BBC, unhindered by any trace of self-awareness, has titled “Senior Journalist (Disinformation)”. Robinson demonstrates the qualifications and acumen which earned her that title by warning the BBC’s audience that the Kremlin has been using humor to dismiss and ridicule accusations that have been leveled against it by western governments, a “form of trolling” that she reports is designed to “deliberately lower the level of discussion”.

“Russia’s move towards using humour to influence its campaigns is a relatively recent phenomenon,” Robinson explains, without speculating as to why Russians might have suddenly begun laughing at their western accusers. She gives no consideration to the possibility that the tightly knit alliance of western nations who suddenly began hysterically shrieking about Russia two years ago have simply gotten much more ridiculous and easier to make fun of during that time.

Couldn’t possibly have anything to do with the emergence of a demented media environment wherein everything around the world from French protests to American culture wars to British discontent with the European Union gets blamed on Russia without any facts or evidence. Wherein BBC reporters now correct guests and caution them against voicing skepticism of anti-Russia narratives because the UK is in “an information war” with that nation. Wherein the same cable news Russiagate pundit can claim that both Rex Tillerson’s hiring and his later firing were the result of a Russian conspiracy to benefit the Kremlin. Wherein mainstream outlets can circulate blatantly false information about Julian Assange and unnamed “Russians” and then blame the falseness of that reporting on Russian disinformation. Wherein Pokemon Go, cutesy Facebook memes and $4,700 in Google ads are sincerely cited as methods by which Hillary Clinton’s $1.2 billion presidential campaign was outdone. Wherein conspiracy theories that Putin has infiltrated the highest levels of the US government have been blaring on mainstream headline news for two years with absolutely nothing to show for it to this day.

Nope, the only possibility is that the Kremlin suddenly figured out that humor is a thing.

The fact of the matter is that humorous lampooning of western establishment Russia narratives writes itself. The hypocrisy is so cartoonish, the emotions are so breathlessly over-the-top, the stories so riddled with plot holes and the agendas underlying them so glaringly obvious that they translate very easily into laughs. I myself recently authored a satire piece that a lot of people loved and which got picked up by numerous alternative media outlets, and all I did was write down all the various escalations this administration has made against Russia as though they were commands being given to Trump by Putin. It was extremely easy to write, and it was pretty damn funny if I do say so myself. And it didn’t take any Kremlin rubles or dezinformatsiya from St Petersburg to figure out how to write it.

“Ben Nimmo, an Atlantic Council researcher on Russian disinformation, told the BBC that attempts to create funny memes were part of the strategy as ‘disinformation for the information age’,” the article warns. Nimmo, ironically, is himself intimately involved with the British domestic disinformation firm Integrity Initiative, whose shady government-sponsored psyops against the Labour Party have sparked a national scandal that is likely far from reaching peak intensity.

“Most comedy programmes on Russian state television these days are anodyne affairs which either do not touch on political topics, or direct humour at the Kremlin’s perceived enemies abroad,” Robinson writes, which I found funny since I’d just recently read an excellent essay by Michael Tracey titled “Why has late night swapped laughs for lusting after Mueller?”

“If the late night ‘comedy’ of the Trump era has something resembling a ‘message,’ it’s that large segments of the nation’s liberal TV viewership are nervously tracking every Russia development with a passion that cannot be conducive to mental health – or for that matter, political efficacy,” Tracey writes, documenting numerous examples of the ways late night comedy now has audiences cheering for a US intelligence insider and Bush appointee instead of challenging power-serving media orthodoxies as programs like The Daily Show once did.

If you wanted the opposite of “anodyne affairs”, it would be comedians ridiculing the way all the establishment talking heads are manipulating their audiences into supporting the US intelligence community and FBI insiders. It would be excoriating the media environment in which unfathomably powerful world-dominating government agencies are subject to less scrutiny and criticism than a man trapped in an embassy who published inconvenient facts about those agencies. It certainly wouldn’t be the cast of Saturday Night Live singing “All I Want for Christmas Is You” to a framed portrait if Robert Mueller wearing a Santa hat. It doesn’t get much more anodyne than that.

Russia makes fun of western establishment narratives about it because those narratives are so incredibly easy to make fun of that they are essentially asking for it, and the nerdy way empire loyalists are suddenly crying victim about it is itself more comedy. When Guardian writer Carole Cadwalladr began insinuating that RT covering standard newsworthy people like Julian Assange and Nigel Farage was a conspiracy to “boost” those people for the advancement of Russian agendas instead of a news outlet doing the thing that news reporting is, RT rightly made fun of her for it. Cadwalladr reacted to RT’s mockery with a claim that she was a victim of “attacks”, instead of the recipient of perfectly justified ridicule for circulating an intensely moronic conspiracy theory.

Ah well. People are nuts and we’re hurtling toward a direct confrontation with a nuclear superpower. Sometimes there’s nothing else to do but laugh. As Wavy Gravy said, “Keep your sense of humor, my friend; if you don’t have a sense of humor it just isn’t funny anymore.”

Liked it? Take a second to support The Duran on Patreon!
Continue Reading

Latest

EU’s ‘toothless’ response to creation of Kosovo army risks worsening the crisis – Moscow

Russia’s ambassador to the UN said that the EU could have and should have done more to stop the breakaway region from creating its own army.

RT

Published

on

By

Via RT…


The creation of Kosovo’s own 5,000-strong army is a threat to peace and security in a turbulent region and may lead to a new escalation, Russia’s UN envoy has warned, calling the EU’s lackluster response irresponsible.

Speaking at the UN Security Council emergency meeting on Kosovo, Russia’s ambassador to the UN Vassily Nebenzya said that the EU could have and should have done more to stop the breakaway region from creating its own army to replace its lightly armed emergency response force.

“The EU reaction to the decision by Pristina cannot be described as other than toothless. This irresponsible policy has crossed the line,” Nebenzya said, after the UNSC meeting on Monday.

The diplomat said the lack of decisive action on the part of the 28-member bloc was a “great disappointment,” adding that the EU seems to “have turned a blind eye on the illegal creation of Kosovo’s ‘army.’”

The law, approved by Kosovo lawmakers on Friday, paves the way for doubling the size of the current Kosovo Security Force and for turning it into a de facto army, with 5,000 soldiers and 3,000 reservists.

The move did not go down well even with Kosovo’s usual backers, with both NATO and the EU voicing their indignation. NATO’s General Secretary Jens Stoltenberg called the decision “ill-timed” and lamented that Kosovo’s authorities had ignored “the concerns expressed by NATO.”

The EU’s top diplomat, Federica Mogherini, has echoed those concerns, saying in a statement that the mandate of Kosovo’s forces “should only be changed through an inclusive and gradual process” in accordance with the state’s constitution.

The only nation to openly applaud the controversial move was the US, with its ambassador to Kosovo, Phillip Kosnett, saying that Washington “reaffirms its support” for the upgrade as it is “only natural for Kosovo as a sovereign, independent country” to have a full-fledged army.

The Kosovo MPs’ decision has drawn anger in the Serbian capital Belgrade and provoked a strong response from Moscow, which calledon the UN mission in Kosovo to demilitarize the area in accordance with UNSC resolution 1244, and to disband any armed units.

Nebenzya pointed out that the UN resolution does not allow any Kosovo Albanian military units to be present in the region’s territory. He accused Western countries, including members of the NATO-led international peacekeeping force (KFOR), of “condoning and supporting” the violation by Pristina of the resolution.

It is feared that the army, though a relatively small force, might inflame tensions in the region and impede attempts at reconciliation between Pristina and Belgrade. Serbia has warned that it might consider an armed intervention if the army becomes a threat to the 120,000-strong Serb minority in Kosovo.

“The advance of Kosovo’s army presents a threat to the peace and security in the region, which may lead to the recurrence of the armed conflict,” Nebenzya stated.

In addition to creating its own army, Kosovo in November hit Serbia with a 100 percent import tariff on goods, defying calls by the US and the EU to roll the measure back.

Liked it? Take a second to support The Duran on Patreon!
Continue Reading

Latest

Ukraine’s President Says “High” Threat Of Russian Invasion, Urges NATO Entry In Next 5 Years

Poroshenko is trying desperately to hold on to power, even if it means provoking Russia.

Published

on

Via Zerohedge


Perhaps still seeking to justify imposing martial law over broad swathes of his country, and attempting to keep international pressure and media focus on a narrative of “Russian aggression,” Ukrainian President Petro Poroshenko denounced what he called the high “threat of Russian invasion” during a press conference on Sunday, according to Bloomberg.

Though what some analysts expected would be a rapid flair up of tit-for-tat incidents following the late November Kerch Strait seizure of three Ukrainian vessels and their crew by the Russian Navy has gone somewhat quiet, with no further major incident to follow, Poroshenko has continued to signal to the West that Russia could invade at any moment.

“The lion’s share of Russian troops remain” along the Russian border with Ukraine, Poroshenko told journalists at a press conference in the capital, Kiev. “Unfortunately, less than 10 percent were withdrawn,” he said, and added: “As of now, the threat of Russian troops invading remains. We have to be ready for this, we won’t allow a repeat of 2014.”

Poroshenko, who declared martial law on Nov. 26, citing at the time possible imminent “full-scale war with Russia” and Russian tank and troop build-up, on Sunday noted that he will end martial law on Dec. 26 and the temporarily suspended presidential campaign will kick off should there be no Russian invasion. He also previously banned all Russian males ages 16-60 from entering Ukraine as part of implementation of 30 days of martial law over ten provinces, though it’s unclear if this policy will be rescinded.

During his remarks, the Ukrainian president said his country should push to join NATO and the EU within the next five years, per Bloomberg:

While declining to announce whether he will seek a second term in the office, Poroshenko said that Ukraine should achieve peace, overcome the consequences of its economic crisis and to meet criteria to join the EU and the North Atlantic Treaty Organization during next five years.

But concerning both his retaining power and his ongoing “threat exaggeration” — there’s even widespread domestic acknowledgement that the two are clearly linked.

According to The Globe and Mail:

While Mr. Poroshenko’s domestic rivals accuse him of exaggerating the threat in order to boost his own flagging political fortunes — polls suggest Mr. Poroshenko is on track to lose his job in a March election — military experts say there are reasons to take the Ukrainian president’s warning seriously.

As we observed previously, while European officials have urged both sides to exercise restraint, the incident shows just how easily Russia and the West could be drawn into a military conflict over Ukraine.

Certainly Poroshenko’s words appear designed to telegraph just such an outcome, which would keep him in power as a war-time president, hasten more and massive western military support and aid, and quicken his country’s entry into NATO — the latter which is already treating Ukraine as a de facto strategic outpost.

Liked it? Take a second to support The Duran on Patreon!
Continue Reading

JOIN OUR YOUTUBE CHANNEL

Your donations make all the difference. Together we can expose fake news lies and deliver truth.

Amount to donate in USD$:

5 100

Validating payment information...
Waiting for PayPal...
Validating payment information...
Waiting for PayPal...
Advertisement

Advertisement

Quick Donate

The Duran
EURO
DONATE
Donate a quick 10 spot!
Advertisement
Advertisement

Advertisement

The Duran Newsletter

Trending