Russia's secret of beating recession revealed

Russia's secret of beating recession revealed

Russia has avoided economic recession, Russian President Vladimir Putin said at the closing ceremony of the BRICS Business Forum in Brazil.

"We have been carrying out a balanced macroeconomic policy for years," Interfax cited him as saying.

Putin noted that Russia is demonstrating a responsible attitude to public funds and is maintaining stability on the banking and loan markets.

However, according to the Russian head of state, Russia's GDP growth rates remain insufficient.

The vice-rector of the Academy of Labour and Social Relations Alexander Safonov, speaking to Vestnik Kavkaza, stressed that it was government policy that helped the Russian economy avoid recession. “First, the government has implemented projects to increase wages in the public sector. Second, the government has a high share in financing national projects, for example, 20 billion rubles were allocated for financing the military-industrial complex. These funds supported not only the military-industrial complex, but also related industries - metallurgy and heavy engineering. Te agro-industrial complex was supported in the same way," he recalled.

"The monetary policy of the Central Bank, which froze inflation, also help to overcome the recession," the vice-rector of the Academy of Labour and Social Relations added.

At the same time, the economic situation is still unstable, with growth within 1%. “Now we cannot say that we fundamentally overcame the problem of recession, at least in 2019. If, according to the estimates of the Ministry of Economic Development, we will go to the track of increasing GDP by 2% in 2020, then we can say that we overcame the recession, since the projected average global GDP growth is predicted within 1-2.5% by the IMF, OECD and the World Bank," Alexander Safonov noted.

Head of the State Duma’s Committee for Financial Markets Anatoly Aksakov agreed with Safonov. “Such actions by the government as the balanced monetary policy of the Bank of Russia, the budget rule, subsidies for interest rates, in particular, mortgages, certain economic sectors and small business fulfilled their mission. National projects also played a role, although they are being implemented more slowly than planned. But they create new drivers of economic growth," he stressed.

“We see that economic growth has accelerated in recent months. Everything suggests that we did not slip into a recession, although many experts predicted that. Our economy has overcome the difficulties associated with many internal reasons, now they are under state control. There is still dependence on hydrocarbon exports, which is dependence on foreign markets, and therefore external shocks may cause a recession. To a large extent, we already understand how to overcome internal problems, but everything linked to external factors remains a risk to us," Anatoly Aksakov concluded.