Putin says Russia’s economy growing despite decline forecast

ST. PETERSBURG, Jun 20 (PRIME) -- The Russian economy is growing despite a forecast of a small decrease by the end of the year, President Vladimir Putin said at a meeting with heads of international news agencies late on June 17.

“We planned a small decline in the economy at the end of this year. But now we see a 0.6% growth in the processing sector, a 0.8% growth in the agriculture industry, and on the average (growth of) 0.5%. That’s why we have certain achievements, and we plan to further move in this direction of diversification and attraction of investments, a whole range of instruments was created for this,” Putin said.

A net capital outflow from Russia has decreased almost ninefold, which means that the money remains in the country and its investment attractiveness increases, he said.

A decrease of investments is connected both with a decline in energy prices and a necessity to diversify the economy, Putin said.

“This is connected with oil prices, because revenue from the energy business is decreasing due to lower oil prices, while significant investments of previous years were connected with oil, gas, energy on the whole and infrastructure around it. That’s why there is a connection, and it is direct,” he said.

One of the key tasks is to diversify the economy, Putin said.

Russia and Ukraine will resume their normal gas cooperation after Kiev realizes that it has no monopoly on gas transit to Europe, Putin also said.

“… if Ukraine starts to realize that it does not have a monopoly on transit of Russian energy sources to Europe, the blackmail by some officials in that country over these deliveries will stop and we will return to a normal business cooperation,” Putin said.

Russia is not refusing to transport gas through Ukraine completely, though the main issue is the volume of gas and its distribution.

Putin also expressed regret that the South Stream gas pipeline project was not implemented.

“Of course we regret that we were prevented from implementing the South Stream. But I asked our colleagues today – why did you not fight for its existence before? The countries that were interested, Bulgaria, other states. They could have gone to the European parliament and explain the importance of this project for their countries,” Putin said.

The Nord Stream gas pipeline project was designed to satisfy the growing energy demand of the Northern European states and not to replace the South Stream gas pipeline, Putin also said.

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