UPDATE: Medvedev: Russian economy on verge of growth

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GORKI, Moscow Region/NOVO-OGARYOVO, Apr 17 (PRIME) -- Russia’s economic contraction has almost stopped and there are conditions for resumption of growth, which is the major government’s achievement in 2016, Prime Minister Dmitry Medvedev said on Monday at a meeting with deputy prime ministers.

“We are presenting a report for 2016 to the State Duma the day after tomorrow. We all had to make tough decisions last year, to seek compromises between our needs and our financial capacities. We succeeded in many things and failed in some other directions, but the major goal that we achieved is that the economy contraction has almost stopped, and conditions for resumption of growth were created,” he said.

“This is the main result of the work, and I will tell deputies about that,” he added.

Medvedev also told President Vladimir Putin that Russia’s unemployment would not exceed 5% of economically active people this year after 5.5% in 2016. The government managed to keep unemployment within the manageable range, he said adding that unemployment in the majority of European countries amounts to 10%.

Putin suggested Medvedev develop additional measures to support investment taking into account ruble strengthening.

“Today, favorable conditions are forming for hi-tech imports, and I mean strengthening of the national currency, of the ruble. This is a fundamental factor which becomes more or less attractive due a floating exchange rate, but it would be reasonable to think about additional measures to support investment in the Russian economy under the current conditions,” Putin said.

Medvedev said that the government will develop additional measures and added that the government agenda today focuses on creation of a technological and efficient economy that creates revenues that allow it to be less dependent on oil.

He also said that budget deficit, which amounted to 1.4% of the gross domestic product in January–March according to a preliminary estimate of the Finance Ministry, is at an acceptable level, as well as the sovereign debt.

“Speaking about sovereign debt – it remains almost flat, but we are working on reducing deficit. We have prepared measures to narrow budget deficit in the next three years in accordance with your ruling,” he told Putin.

The government is also working on suggestions for the future of Russian taxation system after 2018, he said.

Previously, the government introduced a moratorium on tax hikes until the end of 2018. Later, Putin ordered the government to develop suggestions on key parameters of the tax system for 2019 and following years until December 1, 2017.

“We are now preparing proposals for the future and on how the taxation system could look in the following years under your orders,” Medvedev said, adding that the government keeps the moratorium despite a difficult economic situation of the past several years.

“I think this is very important for business. We’ve received many proposals to raise this or that tax in order to eliminate some problems, but we did not do that. I think it is crucial for a normal and stable investment climate in the country,” he said.

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