UPDATE2: Russia’s Putin says peak of economic crisis over

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MOSCOW, Dec 17 (PRIME) -- The Russian economy has passed the peak of crisis, President Vladimir Putin said Thursday during an annual press conference.

“Statistics shows that the Russian economy has on the whole overcome the crisis. At least, the peak of crisis,” Putin said.

He said there were signs of business activity stabilization starting from the second quarter of this year.

Industrial production growth of 0.2–0.1% was recorded in September–October, Putin said. In the country’s Far East, industrial output grew even 3.1%, he said.

Agriculture is demonstrating positive dynamics with output growing at least 3% in 2015, and the grain harvest exceeding 100 million tonnes for a second consecutive year, he said.

Investors start showing interest in working in Russia, Putin also said.

“We see a net capital inflow, which is also quite a positive thing…I’m sure and experts also say that investors, understanding conditions of our economy, start showing interest in operating here,” he said.

The situation on the labor market is stable as compared with 2008, with the unemployment level fluctuating at around 5.6%, Putin also said.

It is necessary to continue work to improve mechanisms of economic management, Putin said.

BUDGET

Budget deficit will amount to 2.8–2.9% of gross domestic product (GDP) in 2015, below the forecast of 3%, Putin also said.

“The federal budget income amounted to 12.2 trillion rubles in the first 11 months of this year, and spending was at 13.1 trillion rubles. As we see, budget deficit is at 957 billion rubles. The expected level of budget deficit this year is 2.8–2.9% of GDP,” he said.

He said the figure was quite satisfactory for the current economic situation.

The oil price of U.S. $50 per barrel, used for the macroeconomic forecast, is overly optimistic, and Russia may need to revise its budget, Putin also said.

“We were already forced to recalculate everything at the end of this year, we were forced to recalculate everything already at the end of last year, because the (oil) price has halved: it used to be $100 per barrel and it became $50. We calculated next year’s budget basing on this figure, $50 per barrel is an optimistic figure at present. But the price is now at around $38… That’s why we will have to revise something here as well,” Putin said.

Russia is fully fulfilling its liabilities to international credit organizations, despite the current restrictions, Putin also said. Foreign debt fell 13% as compared with 2014, capital outflow has significantly fallen and even a capital inflow was registered in July–September, he said.

The government is also fulfilling all its social obligations, including pension indexation, Putin said.

(70.4012 rubles – U.S. $1)

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