PM: Russian economic growth should exceed global rates

MOSCOW, Dec 15 (PRIME) -- Russia cannot be content with economic growth of even 1.5%, its expansion must top exceed the global rates, Prime Minister Dmitry Medvedev said in an interview with five TV channels broadcast on Thursday.

“We will be straightforward: growth rates of 0.5%, 1.0% and even 1.5% do not suit us, although, of course, it is better than what the economy has demonstrated this year,” he said.

“Why doesn’t it suit us? Because we want qualitative changes in the economy of our country, and this can be reached, and the president’s speech said so, only on condition that we grow faster than the rest of the world.

He said that this objective is difficult but realistic. “We have recently tried to make decisions aimed at changing the structure of our economy,” he said. “Previously, decisions were based simply on economic calculations, but two years ago we were forced to make them due to both the external situation and internal problems.”

Russia’s gross domestic product (GDP) may fall 0.5% in 2016, but the economy will switch to growth next year, he said.

“This year we will most likely have a small reduction of GDP, slightly below 1%, maybe 0.5%, it is necessary to sum it up. Next year our economy will switch to growth,” he said.

The Economic Development Ministry’s forecast implies a GDP decline of 0.6% in 2016 and a 0.6% growth in 2017 on condition that the annual average oil price amounts to U.S. $40 per barrel.

Medvedev said that inflation will amount to around 5.5% in 2016, a historically low level.

“This year’s planned inflation amounts to 5.8%. But in fact, I think – we discussed this issue with the economic minister yesterday – it will be around 5.5%. This is the lowest result in the entire history of our country,” he said.

The Russian government is fulfilling all its social obligations and has maintained macroeconomic stability, but the figures could have been better, Medvedev also said.

“We pay wages, pensions, we develop education and healthcare, this is probably the main result of the social and economic development in these quite difficult economic conditions. Frankly speaking, the macroeconomic figures could have certainly been better,” he said.

Budget allocations for healthcare will grow every year and all plans in this sphere will be fulfilled, he said.

“If this year it amounts to around 2.6 trillion rubles, next year the healthcare budget will stand at around 3 trillion rubles, in 2018 it will be 3.150 trillion rubles, in 2019 – 3.250 trillion rubles – so this budget is growing,” he said.

The government did not choose to start the printing press, increase budget deficit and state debt, otherwise it would have returned to the situation of the 1990s, the prime minister said.

“If we had pumped money into the economy, our inflation would have increased, wages of our people would have again depreciated, pensions would have depreciated, it would not have been possible to plan mortgage loans. We would have returned to the situation of the 1990s,” he said.

Russia’s grain harvest will reach a record of 118 million tonnes in 2016, Medvedev also said.

End