‘Russia is confidently coping with external challenges’: main points from Putin’s meeting on economic issues

Possible consequences of “sanctions obsession”

Opening the meeting, the Russian leader addressed the holiday with which this week began — the 77th anniversary of Victory in the Great Patriotic War. Putin drew attention to that it was achieved thanks not only to the successes at the front, but also to the economic power of “our country, which then opposed the industrial potential of not only Germany, but practically the whole of Europe, which the fascists enslaved”.

Putin recalled that in recent months the Russian authorities have had to build up work to ensure sustainable economic development in the conditions of “difficult external restrictions”, that is, Western sanctions that collapsed after the special operation in Ukraine began. According to the head of the state, they are provoking a global crisis in many ways.

“Their authors, guided by short-sighted, inflated political ambitions, Russophobia, are more likely to strike at their own national interests, their own economies, and the well-being of their citizens. We are seeing this primarily due to a sharp increase in inflation in Europe. In some countries, it has already come close to 20 percent per annum, and in the eurozone as a whole, commodity prices have added over eleven percent," Putin said.

According to his forecast, if the West continues to 'churn out' sanctions, this obsession “will inevitably lead to the most difficult consequences” for both the European Union and its citizens, and for the poorest countries of the world, which are already facing the risks of hunger.

“I would like to emphasise that the blame for this lies entirely with the elites of Western countries, who are ready to sacrifice the rest of the world for the sake of preserving their global dominance," the Russian leader stated.

According to Putin, “Russia is confidently coping with external challenges”. He explains this by the responsible macroeconomic policy of recent years and systemic solutions “to strengthen economic sovereignty, technological and food security”.

A good harvest, slowdown in inflation, and possibilities of budget system

Putin drew attention to that Russian companies have already replaced Western ones, who left after the start of the special operation in Ukraine. He considers the latter “unscrupulous partners”.

The president also drew attention to a gradual slowing of inflation. He said that in April its rates decreased several times to the level of March, the weekly price increase dropped to 0,1%.

“This is already close to the weekly growth rates corresponding to the Bank of Russia's inflation target," the head of the state stated.

Putin said that the possibilities of the country's budget system are growing. For example, in the first four months of 2022, the consolidated budget surplus is estimated at 2,7 trillion rubles. Expenses have also grown noticeably over this time. This is due to decisions on advanced financing of development projects and advance procurement.

“Against the background of a record positive foreign trade balance, the exchange rate of the national currency, the ruble, is also strengthening. This year, it is demonstrating probably the best dynamics among all currencies in the world," Putin announced.

A number of trends that require special attention

Having finished talking about the success of the Russian economy, which the West is attacking with sanctions, Putin moved on to trends that “require special attention”. These are the incomes of the Russians, domestic demand.

Putin recalled that citizens' incomes are the most important indicator of the success of socio-economic policy. He recalled that the authorities have already decided to expand the programme of benefits to needy families with children — from April it applies to families where children up to and including 16 years old grow up. Payments retroactively began the day before, on May 11.

“To ensure positive dynamics here, it is necessary to support consumer demand, increase the opportunities of businesses and regions of the country," Putin outlined the vector of income support for citizens.

The president also reminded that the Russian authorities have already decided on additional financial support for the regions. We are talking about the restructuring of their debts and the provision of loans from the federal budget.

“All procedures here must be as clear and convenient as possible for the subjects of the Federation. These mechanisms should encourage the regions to finance additional economic development programmes, including the recapitalisation of regional industrial development funds, ensure the fulfillment of all obligations and programmes at the local level, the continuation of capital construction — all this must be done," Putin instructed.

Saturation of the economy with liquidity

“At the end of April, we agreed to take special measures to provide the economy with additional resources, as experts say, to saturate it with liquidity. This is important for the stable work of enterprises and organisations, for maintaining and even increasing employment," Putin reminded the participants of the meeting on economic issues.

He said that such measures include a delay in the payment of insurance premiums for the second quarter of 2022 for a year. They will start paying them from May 2023. This opportunity will be given to the enterprises employing about 52 million Russians, the head of the state said.

“In total, businesses will have the opportunity to keep about 1,1 trillion rubles in circulation. In fact, these funds will become an annual interest-free loan from the state," Putin said.

He recalled that companies in the manufacturing sector will be entitled to a deferral on insurance premiums for the third quarter of 2022. According to Putin, this is about another 1,5 trillion rubles.

The president drew attention to that the Bank of Russia continues its policy of easing monetary policy. The regulator is also working to increase the availability of loans in general. He recalled that the key rate for today is 14%.

The head of the state also reminded about the preferential mortgage. Currently, it is 9%. The programme itself has been extended until the end of 2022.

“This decision should be a help for Russian families who are planning to buy an apartment, improve their living conditions. We need to think about this further. And of course, preferential mortgage mechanisms will support the construction industry and related sectors of our economy," Putin believes.