Meeting on policies to stimulate economic growth


Opening remarks by Dmitry Medvedev:

Today we will continue our discussion from the previous meeting, which was held not long ago, of measures to stimulate economic growth. Now I would like to hear your ideas or comments on last month’s discussion.

I won't say anything new – all of you are familiar with the situation. The global economy is going through a difficult period, still experiencing the repercussions of the global economic crisis. Russia is facing more or less the same risks. Unfortunately, we know for a fact that the growth of key macroeconomic indicators has slowed down. The GDP in November grew about 2%, compared with 4.9% in the first quarter.

Industrial production trends are very unstable: the annual increase fell to 2% from 2.5% in the third quarter. In general, these specific figures are not as important as the causes behind them and the extent to which we can influence those causes. The domestic causes include this year’s crop failure, which pushed down Russia’s GDP in the third quarter. In any case, I know based on estimates that the GDP shrank 0.3%. The demand for energy resources decreased as well, which is always painful for Russia’s economy, although right now consumption should actually increase considering the cold weather in Europe.

The recent macroeconomic trends called for an adjustment of the 2012-2013 projections: the Economic Development Ministry had to downgrade its industrial growth estimate from 3.6% to 3.2%. The consumption growth estimate changed from 6.1% to 5.7%. GDP growth for 2013 will be revised as well. But again, what I am trying to say is that we need to sit down and think about what we can do to change this situation. I know that we are unlikely to come up with a cure-all solution, that any measure we propose would only be effective as part of a larger policy, but we still need to analyse any ideas that we have.

Let me remind you that we have discussed infrastructural restrictions, as well as the need to adjust some of the aspects of our monetary policy, if needed. But there are also other stimuli which could promote economic growth. We need to find the best solution to help us keep inflation relatively low, which is highly important both now and in the coming years, while at the same time allowing us to stick to our budget rule and pursue an effective monetary policy.

Let’s hear your ideas, taking into account the previous discussion.



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