The prime minister addressed the 25th meeting of the Foreign Investment Advisory Council (FIAC).
On Monday, world business leaders from major corporations gathered at Hotel Baltschug Kempinski in Moscow for the 25th FIAC meeting. Vladimir Putin gave a speech. Putin said foreign direct investment from 2009 to the third quarter of 2011 exceeded $100 billion. “In the first nine months of this year we saw direct investment surge by almost 20%,” Putin noted.
According to the prime minister, growth has been recorded in many areas other than the energy sector. Industrial production grew by 5.4% in the first eight months of 2011, with processing outpacing that with a 7.6% growth rate. Putin also pointed out the growth in agriculture, which is expected to be at least 14%.
This shows that the structure of the economy is gradually changing in the direction we need it to, the prime minister said.
The prime minister also said the country’s GDP is expected to grow by 4% by the end of 2011, or even a little more. So, the Russian economy will recover from the decline caused by the crisis and reach pre-crisis levels by this quarter.
The prime minister added that this year’s federal budget will not run a deficit but that in the next three years, he does expect a minor deficit: 600 billion roubles will be channeled on the modernisation of the healthcare system and education. Starting this year, companies in these areas will be exempt from profit tax. By 2015, Russia will achieve a deficit-free budget, Putin added.
“One of our priorities has been and remains fighting inflation,” Putin said. “This year inflation will run at about 7%. This will be a new all-time low for modern Russia.”
The prime minister reminded those at the meeting about the serious economic problems the West faces. “Hundreds of thousands of people, rather than a small special interest group, have taken to the streets and demanded the fulfillment of commitments, an objective which their national governments are unable to accomplish. These socio-economic issues have taken on a truly formidable scale; they have begun to engulf the economy and will start inflicting real economic losses.” Given these circumstances, Putin thinks it’s necessary to make timely decisions in the social sphere.
“We are doing this cautiously but consistently. It is our intention to continue pursuing this. We will certainly fulfill all of our social commitments to Russian citizens. Today, Russia is prepared for various scenarios in global economic development. We have much experience and have a margin of safety both in manufacturing and finance,” Putin said.
“We applaud the Russian government for its handling of the economic crisis,” James Turley, CEO of Ernst & Young, said to Putin. “We support your candidacy for the presidency and hope for continued cooperation with the next prime minister.”
Andrei Ryabtsev
