Azernews.Az

By Bloomberg

Russia is weathering the economic crisis better than some expected amid challenges from the slump in oil prices, President Vladimir Putin said.

“Many people predicted a deep crisis in Russia and this has not happened,” Putin said in a speech to the St. Petersburg International Economic Forum on Friday.

The government has maintained control over inflation, which is decelerating, and has a “sustainable budget,” while the economy has shown resilience, with unemployment low at 5.8 percent, Putin said.

Government officials in St. Petersburg have sought to present an optmistic picture of the economy’s prospects even as Russia staggers through its first recession in six years. Deputy Finance Minister Maxim Oreshkin said that on a quarterly basis the April-June period will show a “less negative” performance than in the prior three months, which showed gross domestic product contracted 2.2 percent from a year earlier, the first drop since 2009 and down from a previous estimate for a 1.9 percent decline.

Others have been more critical of the country’s prospects. Russia is “in the eye of the storm” and in a full-fledged crisis, former Finance Minister Alexei Kudrin told the forum. The economy may shrink for two years in a row for the first time under Putin if oil stays at $60 through 2016, according to the central bank.

Upgrade Economy

Russia is focused on long-term growth and wants to have a predictable investment climate, while taking steps to improve the transparency of domestic companies, Putin said. Tax rates will be fixed for the next four years and there’ll be a moatorium on official checks on small businesses for three years from 2016, he said.

Russia wants to upgrade the technological standards of its economy so that its companies “take key positions in those markets that will determine the economy and lifestyle of people in two or three decades time,” Putin said.

Sanctions imposed by the U.S. and the European Union over the conflict in Ukraine prompted Russia to promote import substition, though this policy isn’t intended to close off the domestic market, he said.

“Ladies and gentlemen, Russia is open to the world,” Putin said. “I am sure that this dialogue is in our common interests.”