Russian President Vladimir Putin hailed on Thursday the Russian financial system as “stable” although he expressed concern over “worrying” excessive inflation, nearly three years into the beginning of the Ukraine offensive.
“With the economy as a whole, the situation in Russia is stable, despite external threats and attempts to influence us,” Putin mentioned at a televised end-of-year news convention.
However, acknowledging issues over the quick tempo of worth rises, Putin mentioned: “Inflation is a worrying signal.”
Despite unprecedented Western sanctions, Russia’s financial system has been secure this 12 months – particularly compared to Western industrialized nations, Putin mentioned.
Gross home product (GDP) will develop by 3.9% in 2024, “perhaps even by 4%,” the Kremlin chief predicted at his annual question-and-answer broadcast.
In the previous two years, GDP has even elevated by 8%, Putin mentioned, noting that Germany – Europe’s largest financial system – had proven 0% progress in the identical interval.
He admitted that there have been issues within the struggle towards inflation, with costs rising by as much as 9.3% over the 12 months. However, within the case of meals, for instance, this was as a result of the truth that consumption had elevated, Putin mentioned.
Addressing Russians in his annual phone-in, Putin backed the central financial institution’s tight financial coverage but in addition prompt it might have acted in a extra well timed trend.
Putin mentioned that the central financial institution might have used devices aside from the important thing fee earlier to chill down the financial system, whereas the federal government might have labored with completely different sectors of the financial system to spice up provide.
‘Bad factor’
“It would have been necessary to make these timely decisions. This is an unpleasant and bad thing, in fact, the rise in prices. But I hope that in general, while maintaining macroeconomic indicators, we will cope with this too,” Reuters cited him as saying.
Putin mentioned that Western sanctions, in addition to this 12 months’s dangerous harvest as a result of excessive climate in lots of agricultural areas throughout Russia, had been additionally accountable for prime costs.
The central financial institution is, nevertheless, anticipated to hike its key rate of interest by one other 200 foundation factors to 23%, the very best degree in over 20 years, at its subsequent assembly on Friday. Its tight financial coverage has prompted robust criticism from companies.
“There are some issues here, namely inflation, a certain overheating of the economy, and the government and the central bank already being tasked with bringing the tempo down,” mentioned Putin.
Putin mentioned he had a dialog with the central financial institution’s governor, Elvira Nabiullina, earlier than the phone-in, who had warned him that inflation can be 9.2%-9.3% in 2024, effectively above the central financial institution’s estimate of 8.5%.
Putin mentioned that, as a result of tight financial coverage and authorities measures to chill the financial system, financial progress charges will fall to 4% in 2025 from this 12 months’s 4%.
“I think the (growth rate) next year should be somewhere around 2%-2.5%, a sort of soft landing to maintain macroeconomic indicators,” Putin added.
Households’ inflationary expectations, a key gauge for the central financial institution, hit this 12 months’s highest degree this month. Grigory Zakuraev, a manufacturing unit employee, instructed Reuters that 1,000 rubles on the grocery store go far lower than it did three years in the past.
“Everything has gone up in price,” he mentioned. “Of course, you feel it on the wallet, the change in prices, inflation.”
Economists additionally warn of a big droop in progress charges in Russia within the coming 12 months.
Source: www.dailysabah.com