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President of Russia Vladimir Putin: Mr Prime Minister, we have frequently discussed the current economic situation and are forced to recognise that the global economic crisis is taking on ever more dangerous forms that inevitably have an effect here in Russia too. This was the case in 2008, and we are seeing the same thing happening now. True, unlike our friends and partners in Europe and some other parts of the world, Russia’s economy is still showing its vitality and growth potential.
But we also know that our economic growth rate dropped slightly in late 2012-early 2013, and there has been some contraction in the real sector of the economy. This in turn affects people’s incomes. Wages have gone down. True, people’s general disposable incomes are still relatively stable. There is some recovery underway in the mining sector, and this sends a good signal overall, given this sector’s importance in our economy.
”The global economic crisis is taking on ever more dangerous forms that inevitably have an effect here in Russia too. True, unlike our partners in Europe and some other parts of the world, Russia’s economy is still showing its vitality and growth potential.“
I know that you are scheduled to report on the Government’s work for the last year in the State Duma the day after tomorrow. Overall, it was not a bad year. I hope that you will make successful use not only of our existing crisis management and recovery mechanisms, but also use new instruments too, so as to support and encourage the new growth shoots I just mentioned, in the mining sector in particular, spread them to the other economic sectors, and achieve consensus in the State Duma.
The Duma deputies hold differing views of course and have varying ideas on how to improve the economic and social sectors. But I am confident that the Government – with the Duma majority’s support – will find the optimum solutions.
Prime Minister Dmitry Medvedev: Mr President, we do indeed face a complicated situation in the global economy. We foresaw these difficulties and put in place the so called budget rule. If we had had the feeling that things might develop differently, we would have perhaps taken fewer restrictive measures.
But the developments in the global and European economies do affect our economic progress too, and force us to take a more austere approach to our budget planning and to the budget we are executing this year.
We are seeing different trends in different areas. Regrettably, as you noted, there has been a slowdown in growth rate, and at the same time there are a number of advantages that we must make use of.
I have instructed our Government colleagues to work with the experts to draft proposals on how best to resist the global trends and try to give Russia’s economy some added development boosts. Of course we have to weigh up the costs involved and the macroeconomic impact of any decisions we make.
I will of course explain all of our arguments in the State Duma during the annual report that I will present in accordance with the Constitution, so that the deputies understand what situation our economy and the global economy currently face.
I wanted to suggest that we perhaps meet to discuss in general the Russian economy’s development over the coming period in light of the emerging trends.
Vladimir Putin: Yes, we could do this perhaps during one of our working trips, and invite the Government ministers responsible for the economy and some of the Presidential Executive Office officials responsible for these issues to take part too, as well as members of the expert community perhaps, in order to hear the different points of view and ultimately come up with the best policy line to take.