In a recent meeting of the Council for Strategic Development and National Projects, President Vladimir Putin emphasized the need for the Russian government and central bank to utilize all available tools to reduce financial market volatility. He expressed concern over rising inflationary risks in the country and highlighted the importance of addressing price growth as a top priority.
Putin acknowledged that financial market volatility has significantly increased in recent months, making it challenging for businesses, enterprises, and citizens to make investment decisions. He stressed the importance of limiting unproductive and speculative demand in the economy, controlling capital outflow, and monitoring the behavior of other financial market participants.
The President emphasized that objective data indicates growing inflationary risks and the urgent need to curb price growth. Official statistics show that consumer inflation in Russia was at 3.52% from the start of the year until August 14. In response to the depreciation of the ruble against world currencies, the Bank of Russia recently announced a major interest-rate hike of 350 basis points, bringing rates to 12%, in an attempt to stabilize the currency.
Despite these challenges, Putin assured that Russia’s federal budget remains robust, with a surplus projected for the third quarter. As planned, there will be a deficit of around 2% of GDP for the year, but the President emphasized that the current fiscal situation poses no risks to macroeconomic stability.
In addition to addressing financial market volatility and inflation, Putin emphasized the importance of maintaining investment growth in the country. He called for investments to grow by at least 70% in real terms by 2030 compared to 2020. The President emphasized the need to support companies in their expansion, innovation, and job creation efforts.
Overall, Putin’s remarks highlight the challenges facing the Russian economy and the need for proactive measures by the government and central bank to reduce financial market volatility and address inflationary risks. The President’s emphasis on maintaining macroeconomic stability and promoting investment growth reflects the government’s commitment to ensuring a strong and resilient economy.
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