“The main factor that determined the global economic dynamics this year is the novel coronavirus pandemic. We can see the serious decline it has provoked in industrialized countries and emerging economies and the huge funds that have been allocated to support national economies,” Vladimir Putin said addressing Russia Calling! Investment Forum via videoconference, presidential web page reports.
To fight the pandemic, “total federal allocations approved for support measures amounted to some 4.5% of the GDP,” he noted. Russia’s “economic decline is smaller than in many other countries. The economy declined by 8% in the second quarter,” whereas “as of the middle of October, its gold and currency reserves totalled about $585 bln while the National Wealth Fund equals approximately $176 bln. At the same time, we are sticking to the target inflation rate of around 4%.” Russia has “one of the smallest sovereign debts in the world, approximately 3%, while its aggregate debt is about 17%.”
As the President pointed out, Russia is “focusing on support for small and medium-sized businesses having halved the insurance premiums for these companies, from 30 to 15%. Small and medium-sized businesses working in the affected sectors can delay tax and insurance premium payments for the first quarter of 2020 by up to six months. It has also been decided to extend the moratorium for planned inspections of small businesses until the end of 2021. These steps are therefore reducing the administrative and tax burdens for tens of thousands of companies employing millions of Russian citizens.”
“Russia has maintained macroeconomic stability, prevented an inflation hike and ensured financial market stability,” Vladimir Putin believes. “The Russian economy has slowed but not as steeply as the other economies, including those of the so-called industrialized countries.”
Russia intends to act and is already taking measures in such key spheres as “stimulating investment, promoting exports and ensuring a broad-based introduction of digital technologies. Russian assets enjoy demand on the market. Since earlier this year, the domestic issuers have raised $37 bln on public debt markets, and the securities market placements have brought in over $6 bln, a record-breaking amount over the past few years. Stimulating investment is a national priority at the current moment, bearing in mind the goal of long-term future-oriented economic development. Of course, reliable and safe mechanisms for investing in new financial instruments are available to both Russian and international investors. We value every partner who wants to work together with us,” the President stressed.
“Another instrument for the implementation of large projects important for entire regions and territories should be investment protection and encouragement agreements, which have a so-called stabilization clause that guarantees the stability of tax terms, use of land and construction conditions for investors, whose spending on infrastructure will be made up for through the amount of taxes paid,” he said. “We will, of course, have a decline in the economy, but it will be much less pronounced than in other countries at about 4% this year and 4.2% next year. In a year, growth will resume, including an increase in our surplus. This year, the budget deficit will amount to 4.4%, and next year to about 2.4%. The year after that there will be a surplus of about 1%. The economy will grow in step.”