Putin: Russia needs measures to restart economic growth

(Interfax – NOVO-OGARYOVO, near Moscow, July 4, 2013) President Vladimir Putin on Thursday insisted on urgent measures to restart Russia’s stalled economic growth.

“Let me stress that the situation in the economy is such that we can’t wait, and spending time on the constant coordination of positions between agencies is also counterproductive. We should act, move forward, make balanced systemic decisions and urgently put them into practice,” Putin told a conference on banking.

He mentioned that there had been a whole series of conferences recently that considered ways of stimulating economic growth.

Russia needs measures that would stimulate enterprise, facilitate new projects, primarily in non-commodity sectors, and “open up extra opportunities for the renewal of fixed assets, the creation of jobs, and higher productivity,” he insisted.

“Our companies, our enterprises, including small and medium businesses, need cheap and, as one normally calls it, long money, primarily loans. However, in the opinion of entrepreneurs, the cost of bank loans is patently too high at the moment,” he said.

He mentioned earlier measures.

One of them is a 2004 rule that limits rises in prices set by natural monopolies to the de-facto inflation level of the previous year. The reason is that the cost of loans is linked to inflation natural monopolies’ prices remain a powerful factor, Putin explained.

“Simultaneously, a proper balance must be found between the course for the stabilization of inflation and greater accessibility of loans,” he said.

This is largely the responsibility of the Central Bank, Putin said. However, the government “must act consistently and efficiently within its competences,” he said.

Putin said that, though inflation is on the decline, Russian banks keep their interest rates unchanged and some have even put them up.