Putin says the Russian economy is not in crisis.
MOSCOW – Russian President Vladimir Putin said on Tuesday that the country’s economy was not in crisis and the worst was over, with the central bank due to meet this week to decide whether or not to cut the interest rate following the rebound of the ruble.
“We went through the main peak of stress,” Putin told a media forum in the northwestern city of St. Petersburg.
“It doesn’t mean that everything in the country is now going to start growing. Maybe we haven’t even felt what happened at the end of last year and the beginning of this one yet.” , Putin said.
“During the year we will feel it and it will be reflected in various indicators,” he said.
“But overall it is already clear that there is no collapse,” Putin insisted, noting that “the foundations of the Russian economy have strengthened and stability cannot be completely destroyed”.
“I wouldn’t even call it a crisis,” Putin added. “There are certain phenomena, certain difficulties.”
Following the fall of the ruble at the end of 2014 and at the beginning of this year following Western sanctions over the Ukrainian conflict and the fall in oil prices, Russia’s growth fell in the first quarter compared to the same period a year earlier. early, for the first time since 2009.
The Russian government estimated that the economy contracted by 2.2% in the first quarter.
A surge in inflation led to a drop in purchasing power and consumption, while a sharp increase in interest rates in December by the central bank led to a sharp drop in lending and credit activity. businesses.
The rebound of the ruble (by more than 30% since the beginning of March) gives hope that the recession expected this year will not be as deep as expected.
The authorities hope that the rebound will encourage the central bank to significantly lower the interest rate, which it has already cut twice this year, from 17% at the start of the year to 14% currently.
The Bank of Russia will hold its next monetary policy meeting on Thursday and most economists predict it will lower the interest rate by at least one percentage point.
Economy Minister Alexei Ulyukayev said on Monday that the situation was “quite favorable” for an interest rate cut.
The strengthening of the ruble “gives room for maneuver to the central bank”, say economists at VTB Capital.