Putin: Russian 2020 economic crisis not deep, but spurs inflation

MOSCOW, Jan 21 (PRIME) -- Russia’s economy contracted less in 2020 than in many developed and emerging countries, but spurred inflation, President Vladimir Putin said at a government meeting on Thursday.

“Like I said before, and as we all know well, the depth of economic contraction in Russia in 2020 was lesser than in may developed and emerging economies,” he said, adding that some macroeconomic figures returned to their usual at the end of the year.

“Unfortunately, inflation sped up at the end of the year. It exceeded the Bank of Russia’s target and amounted to 4.9%. At the same time, prices for certain types of goods and food in the first place grew even higher and rose by 6.7%, and it is just on average.”

He also suggested that the government return to discussion of price stabilization for food taking into account the results of January.

Putin said that unemployment has started to contract in the past several months with the help of the government’s economic support measures.

“After a peak of 6.4% in August, unemployment fell to 6.3% in October and to 6.1% in November. Still, it is very high, higher than what we had in 2019 by about one and a half percentage point,” he said, adding that the government should maintain the trend and achieve full recovery of the labor market until the end of 2021.

It is very important for the government to not only get the country back to pre-crisis figures, but to ensure sustainable growth, he said.

Factors of instability prevail in all economies of the world due to the pandemic and disruption of the ties and connections, the government has to decide what will have a positive impact on the Russian economy and on lives of Russians as soon as possible, Putin said.

He also paid attention to the imbalances on the housing markets in several regions. In 2020, the government launched a 6.5% mortgage program and 350,000 families have already used it to buy new housing.

“The low-rate mortgage also supported the housing construction industry like we planned. Launches of new residential projects have expanded since August of the previous year. But some imbalances on the housing markets of some regions have emerged, housing prices are growing rapidly, and there is a lack of affordable options,” Putin said.

“I suggest that we discuss what we have to do in this regard to balance pricing on the market, including options with an increase of housing offers.”

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