PM: Russian govt to continue loan subsidies, help key indus cos

MOSCOW, Jan 13 (PRIME) -- High loan rates are still a major problem for Russia, where the government will continue its programs of loan subsidies, and can also support key industrial producers in 2016 to ease the labor market tensions, Prime Minister Dmitry Medvedev said at a forum Wednesday.

“A high interest rate remains the main problem, this is why we will continue working with a mechanism of its subsidizing. We will also continue competitions for participation in investment project support programs, based on project financing,” Medvedev said.

“We will continue to work on the labor market, first of all I mean help to the key facilities for regions and organizations in the transport sphere, car manufacturing, housing building and the light industry.”

Last year saw a great-scale dilution of the middle class, which was the most problematic outcome of the economic crisis. “The most important and the most serious thing for us is a decline in people’s income. Many people have became poorer, the middle class has suffered, and this seems to be the most hurtful consequence of the economic blows of last year,” he said.

Medvedev said that Russia cannot afford to keep its economic growth near zero for long. “Sure, when many macroeconomic figures hit the red zone, even a small increase looks an achievement but this is a dangerous illusion.” There is a risk of continuous recession, Medvedev said.

Budget spending has to be reduced and some state assets must be privatized, he said. Medvedev also said that oil price fall continuation may force the government to cut the budget again. “We need to prepare for a worse scenario, like they do it in other countries, he said.”

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