Medvedev generally pleased with govt’s performance
(Interfax – SOCHI, May 19, 2013) Normal macroeconomic indices, the budget rule and privatization deals are the main results of the year that has passed since the government started working, said Prime Minister Dmitry Medvedev.
“A year has passed, and it was filled with so many different events. However different opinions may be, the country kept developing, credit for which must be given not only and not so much to the government, as to the general economic situation that took shape some time ago,” Medvedev told the press on Saturday.
Although the pace of economic growth has been slowing, behind which stand various reasons, “many of the macroeconomic parameters, of great importance for us, remain normal,” which creates conditions for further normal work at the minimum, he said.
“What is meant here is a practically zero-level budget deficit. It is always a matter of calculations, but it stands at the basis point, which is practically zero. The debt to GDP ratio is maintained at a fairly good level – 10% – which is another achievement accomplished over the past 15 years, and there are no reasons for its growth. In all industrialized states it is between 80% and 150%,” Medvedev said.
INFLATION AND UNEMPLOYMENT
Inflation indices are not bad on the whole, the prime minister said. “If nothing untoward happens we will manage to keep it within the parameters we had projected for this year, at around 6%. Of course, we will continue pushing it down, and inflation targeting will remain. But the result achieved is fairly good for Russia,” he said.
Russia has also made good progress in beating down unemployment, he continued. “These results may be interpreted in various ways. However, an unemployment that is below the level observed over the previous years – not only the years of crisis, but also pre-crisis years – is good for citizens’ well-being. The 5.5% unemployment was a hard-won victory for us, which involved serious budget spending to support some programs,” he said.
About 400 major indusrial enterprises – not small ones but large and different enterprises – have been launched over the past year, Medvedev said. “This figure is itself positively charged, and it signals an ongoing development, despite problems. I think these figures are quite good,” Medvedev said.
MORTGAGE LENDING
“Many criticized the interest rate on mortgage loans and it is indeed bad – 12.5%, demonstrating a vivid gap between inflation and the mortgage interest rate. The causes of this have been analyzed and certain decisions have been made. Concerning the effectiveness of the expected results – we will wait and see. But I would like to draw your attention to good results, not to the bad interest rate” Medvedev said.
Seven hundred thousand mortgage lending contracts worth 1 trillion rubles were concluded last year. “This is not bad, either. Clearly, those were various mortgage loans – social plus affordable housing. But the trend is vivid,” he said.
BUDGET RULE, PRIVATIZATION DEALS
The introduction of the budget rule is another result the government has achieved. “Honestly, the budget rule was an achievement gained through hard work, in serious clashes of opinions and in disputes. It has finally been adopted and now even its severe critics no longer attack, aware that rule must be observed.,” he said.
But this rule “is not eternal,” he remarked. “It is a rule which we must live by for some time and it will protect us should prices for oil drop,” Medvedev said.
Regarding privatization deals, he said that they are in the making, even though their number is not too great and they have not brought in the revenue expected.
“They are no longer an exotic occurrence, and they are being seriously discussed. Just a little time ago there was stagnation in this sphere, where nothing was happening. We have gained over 200 billion rubles from privatization,” he said.
The policy of privatization will be continued with due account taken of the objective understanding of “what should be sold and when,” he said.
“Privatization in any country always carries a conflict between two basic parties. There always exit the lobbyists. There always exist those willing to run things in a slightly different manner. But the government has a consolidated position here. There are no serious disagreements within the government. Everyone in the government – the economic camp, the economic development and finance ministries, which permanently disagree with each other – have an absolutely the same position. Practically all branch ministries’ positions are similar and we hope this process will continue,” Medvedev said.
Among other achievements Medvedev cited the new method of implementing the budget – the national programs. “This sphere has its own problems. But what is important is that a more or less clear picture is emerging of what will be happening in the coming years, through 2018-20, and even until 2030,” Medvedev said.