Vladimir Putin's speech at the Cabinet meeting:

Good afternoon,

Today, we are holding our first meeting with the new Cabinet lineup. The Cabinet has been formed. I would like to emphasize that the tasks set for our country require the most energetic and pro-active work.

At my speech in the State Duma, I introduced the programme of the Cabinet's top priorities. In the coming months, we will have to refine the Strategy for Russia's Social and Economic Development up to 2020. We will return to it at our further meetings.

In August the Cabinet is to introduce the budget project for 2009 and the next two years into the State Duma. It is obvious that the budget has to become one of the key and most efficient tools of the country's social and economic policy. For this purpose, it is necessary to set the priorities within it and define the key macroeconomic guidelines.

Today, we will consider scenarios and major parameters for the forecast of the country's social and economic development up to 2011. These indicators will be the basis of our budget planning.

When making such a forecast, we must keep the country's innovative path of development as our target. There is no alternative, and this has been repeatedly mentioned. Any other scenario would mean treading water and wasting resources.

We have to increase the competitiveness and efficiency of the national economy, and stimulate investment activity.

We also need an up-to-day social policy aimed at providing conditions for the full development of the country's residents and increasing their living standards.

The Ministry of Economic Development has prepared for the meeting its forecast estimates. According to them, in 2009-2011 the average annual growth rate of Gross Domestic Product is expected to be 6.5 percent. The increase in industrial production is estimated at 5.5 percent, while the agricultural production growth is forecasted at 4 percent and increase in investments is estimated at 13 percent. The share of innovative goods is growing and must grow in industrial production and exports.

Though I have to say, after looking at the figures you gave, that they reveal rather low growth rates. We are talking about the innovative path of development, yet the Economic Development and Trade Ministry's forecast estimates do not show any signs of innovative development. Has anyone seen the forecast? It shows very slow figures.

Here, I should emphasize that we have to consider these figures as a minimum level that we cannot fall short of. In practice, we must achieve higher results.

Within the same period, we have to reach a single figure inflation rate.

The growth of real wages is expected to amount to at least 10 percent per year. The average monthly salary is estimated to reach 29,000 roubles ($1,234) in 2011, while it was 13,500 roubles ($574) in 2007. The income of state employees is expected to considerably increase.

The number of Russia's residents having income lower than the cost of living is expected to decrease to ten percent, while the unemployment level is to go down from the current 6.3 percent to 4.5 percent.

Finally, in the medium term we can expect a halt in the decline of Russia's population, which should be the result of the national demographic policy.

I would like you to notice that all our long-term estimates should be as correct and factual as possible, they should bring together various factors, such as foreign economic conditions. Only having this as the base, will we be able to develop a quality federal budget for the next three years.

At the meeting, we will also consider a number of organisational questions. It is suggested that according to the law the Cabinet Presidium should be formed to increase the efficiency of our work and discuss the current issues. The Presidium will be comprised of deputy prime ministers and a number of ministers.

It is obvious for all of us that the Cabinet meeting is a mechanism that is sluggish and rather bureaucratic. That is why we will meet for the Cabinet meetings at least once a month. All current issues will be discussed weekly at the Presidium meetings, with the invited ministers whose boards have their questions included on the Presidium agenda.

Now let's begin our work. I give the floor to Minister Elvira Nabiullina.