The meeting was attended by Chief of Staff of the Presidential Executive Office Anton Vaino, First Deputy Prime Minister Andrei Belousov, First Deputy Chief of Staff of the Presidential Executive Office Sergei Kiriyenko, Deputy Prime Minister Tatyana Golikova, Deputy Prime Minister – Chief of the Government Staff Dmitry Grigorenko, Deputy Prime Minister Marat Khusnullin, Presidential Aide Maxim Oreshkin, Minister of Economic Development Maxim Reshetnikov, Minister of Finance Anton Siluanov and Central Bank Governor Elvira Nabiullina.
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Opening remarks at the meeting on economic issues
President of Russia Vladimir Putin: Colleagues, good afternoon.
Today we will discuss some current issues on the economic agenda and assess the trends in the key sectors.
Let me note that in general, Russian companies, enterprises and businesses are working confidently, successfully overcoming the difficulties that arise. Moreover, according to statistics, it was not only possible to secure the stability of the real sector, finance and services, but also to achieve significant progress in the critical development areas. This was the task we set when formulating the approaches to economic policy.
You know well that, starting in the second quarter of 2022, Russia’s GDP began to grow by approximately 0.5–0.7 percent quarterly. While GDP decreased by 2.1 percent throughout 2022, in January-May of this year it grew by 0.6 percent, and the pace accelerated every month: up to 5.4 percent in May. We expect the GDP to increase by more than 2 percent by the end of the year.
Recall that forecasts varied: the IMF projected 0.7 percent, and our forecast was around nine. Prime Minister [Mikhail Mishustin] and I spoke recently: we hope that it will be higher than two. So, this growth will fully compensate for last year's decrease.
Manufacturing, construction and retail trade are among the leading industries. Growth in these industries, as well as the entire package of economic support measures, has a beneficial effect on the state of the labour market.
Unemployment, as we know well, is also decreasing. It is 3.2 percent now. At the same time, real wages have grown by double digits for the first time since 2018: more than 10 percent in April. Once again, let me note as always that this is the average and the situation may differ in different sectors and regions, but on average, there is growth and, let me repeat this, in real terms. The general result is good. It has even exceeded expectations and preliminary calculations.
At the same time I want the Government to be mindful of the following: the targets set for the salaries of public sector specialists need to be achieved, otherwise it will lead to employee drain. We understand that people in the public sector will be leaving their jobs. Their salaries need to be indexed as planned.
Next, positive economic trends are what underpins the stability of public finances. In the second quarter of this year, the federal budget deficit shrank to – if I am mistaken, Mr Siluanov will correct me – 510 billion rubles, and for the entire first half of this year it was 2.6 trillion rubles. This is equal to 1.6 percent of GDP forecast for this year. I want to remind you that when the budget was being drawn up the initial figure for budget deficit was 2 percent of GDP.
I want to specifically mention the dynamics of non-oil and gas revenues: in the first half of this year they grew significantly – by 17.8 percent, while the growth rate in the second quarter was 43.5 percent. Along with robust dynamics in the manufacturing sector, this shows that the real economy is growing stronger and domestic industrial business is expanding.
Another positive indicator of business activity is bank lending. According to preliminary data, as of July 1, the annual growth of ruble-denominated corporate loans exceeded 21 percent, and that of loans to individuals was 16.7 percent. The amount of lending like this is an indicator of businesses’ growing demand for mineral resources, materials and equipment. Also, consumer demand is growing for finished products, so in the next few quarters the growth rates of the economy and the country’s budget revenues are likely to remain high.
At the same time we know and see clearly the main risks to socioeconomic development. I recently talked to the Governor of the Central Bank [Elvira Nabiullina] and I share this view of the situation.
One of these risks is growing inflation. Yes, currently inflation is moderate, however, there are signs of it gaining momentum, including due to the gap between supply and demand in the domestic market. It is important to maintain price stability and ensure balance between demand and supply.
Here the Government is playing the leading role. It needs to facilitate maximum expansion of the production of goods and services and help find solutions to problems arising in logistics, the energy sector, real economy and so on.
Generally speaking, as I said at the St Petersburg International Economic Forum, the development of the supply-side economy is our major objective. We will discuss concrete steps and mechanisms that this type of policy may require at the next meeting of the Council for Strategic Development and National Projects.
Let us move on to the discussion of the topic which brought us together here.
The next speaker is Maxim Reshetnikov.
Please, Mr Reshetnikov, take the floor.
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