March 12, 2014, 16:57 / Finance

Putin: 1.5-2% GDP growth cannot suit us

The President believes that the situation in the Russian economy is stable, but it needs more dynamics Ekaterina Kravchenko

Mikhail Klimentyev / RIA Novosti

The situation in the Russian economy is stable, but it needs more dynamics, President Vladimir Putin said at a meeting on economic issues. Russia has good indicators compared to a number of leading European and world economies. At the end of 2013, Italy's GDP decreased by 1.9%, France - increased by 0.2%, Germany - by 0.4%, Russia - by 1.3%, he recalled. Of course, there are differences in economies, but such growth is not enough for us, Putin emphasized. Initially, the Russian government's target for 2013 was set much higher - 3.6%. The Ministry of Economic Development's target for GDP growth for 2014 is 2.5%, but based on the emerging economic dynamics and even before the aggravation of the situation in Crimea, the ministry planned to lower the forecast to approximately 2%.

According to Bloomberg, the ruble is among the weakest world currencies. Analysts fear the active withdrawal of investors from the Russian market due to the situation around Crimea and the possible application of sanctions against Russia. Citi analysts yesterday lowered their forecast for Russian GDP growth in 2014 from 2.6 to 1%. Stagnation could become an optimistic scenario for Russia, experts from the Development Center of the Higher School of Economics warned today.

Growth rates of 1.5-2% cannot suit us, the president emphasized. We need to reach a sustainable, long-term trajectory and achieve greater dynamics. In the current conditions, the main thing is to maintain overall macroeconomic stability and provide for the possibility of promptly responding to both internal and external risks, he stated: “They are not getting smaller.”

This year there have been positive trends - primarily in agriculture, transport and communications, Putin is optimistic; compared to the first months of the past, unemployment rates and - which is pleasant - inflation have decreased. The Bank of Russia's inflation target for 2014 is 5%.

Among the priorities, Putin named supporting the execution of budgets at all levels and maintaining inflation at a low level, creating new incentives for the development of industry and the launch of new manufacturing industries. It is necessary to improve the investment climate and strengthen small and medium-sized businesses and pay special attention to financial institutions supporting projects in the real sector, Putin noted.