UPDATE2: PM says Russian economy, production to grow in 2016

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MOSCOW, Dec 9 (PRIME) -- Russia’s economy and production will grow in 2016, Prime Minister Dmitry Medvedev said on Wednesday in an interview with federal TV channels.

“This (anti-crisis) plan has brought results almost on all directions that we have outlined. We had an aim to stop a decline of production, economy. At present, based on those data that the government has I can say that a decline of economy and production has been ceased,” he said.

“We assume that we will have a growth next year,” Medvedev said.

The prolongation of the anti-crisis plan for 2016 will depend on the development of the economic situation in Russia, Medvedev said.

The government expects to slow down inflation to 6.4% in 2016 and switch to an economic growth, he said.

“I believe that this forecast, this scenario is quite realistic, and we really can reduce inflation two times, to 6.4%, as it is assumed,” Medvedev said. “You know that inflation almost ceased over several past months – this is the first thing. The second thing is that we are able to come on a path of probably not a very strong, but a certain economic growth,” he said.

The most pessimistic forecasts imply a zero economic growth in 2016, while the most optimistic ones predict a growth of around 1%, Medvedev said.

The banking system is operating normally, he also said.

The Reserve Fund’s money will allow Russia to withstand the most difficult economic period, Medvedev said. “We have created it to spend these funds in such situation that we have today,” he said.

The government will continue replenishing reserves as soon as it has such possibility, he said.

Russia will not reduce its social expenditures, he also said.

Medvedev also said he was against introduction of a progressive taxation scale. “A decision has been made, and it was supported by the president, that we will not change the taxation system over the next few years and we will not change the 13% income tax,” he said.

He also said there was no decision made yet to increase the retirement age in Russia.

Russia will not accept Ukraine’s non-repayment of a U.S. $3 billion debt and will go to court and contest default on all Ukraine’s liabilities, Medvedev said. “They (Ukraine) must pay on this loan, this is our strong position,” he said. He said he doubted that Ukraine will repay the debt.

He also said there almost no chances that Russia, Ukraine and the E.U. will agree on Kiev–Brussels association by the end of the year.

The situation with Turkey will impact food prices, but not drastically, Medvedev said. The prices can grow only in case of price collusion, and the government will monitor the situation, he added.

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