Transcript available here.

Taking part in the meeting were Prime Minister Mikhail Mishustin, Chief of Staff of the Presidential Executive Office Anton Vaino, First Deputy Prime Minister Andrei Belousov, First Deputy Chief of Staff of the Presidential Executive Office Sergei Kiriyenko, Deputy Prime Minister Marat Khusnullin, Presidential Aide Maxim Oreshkin, Minister of Economic Development Maxim Reshetnikov, Finance Minister Anton Siluanov, and Central Bank Governor Elvira Nabiullina.

The President’s opening remarks at the meeting on economic issues

President of Russia Vladimir Putin: Colleagues, good afternoon.

We continue exchanging information and views on the state of our national economy and drafting decisions for this sector.

Today, I suggest that we review trends and developments in the key sectors and the current macroeconomic indicators in general. Of course, we will discuss the effect from the measures that were adopted, as well as additional decisions for supporting household incomes and stimulating business activity.

I would like to begin with dynamics in the production sector. Russia’s industrial output increased by 3.9 percent in the first four months of 2022. However, there was a slight decline in April, with a substantial contraction in car manufacturing and oil refining. Several sectors, for example, the steel industry, have been warning us about a significant decline in their output volumes in the medium-term.

As you know, we have already held several meetings on specific sectors of the economy with representatives of the key businesses and the relevant government agencies. Together, we outlined our priorities and future steps, and agreed on specific measures to support companies, producers and their workforce in the current environment.

I would like to point out to our colleagues in the Government that it is essential that these decisions be implemented and help the affected sectors overcome the challenges they face today. These challenges stem from a number of circumstances – let’s not dwell too much on this subject now.

I will add that it is necessary to step up work in these and some other areas, to meticulously study all the details and make well-considered decisions. In this context, we will certainly continue holding sectoral meetings to stay aware of the problems faced by domestic producers, suppliers and contractors, and, of course, to give timely, targeted and effective responses to the arising challenges.

As for positive results, we know well that we have positive dynamics in agriculture and construction. These are vital, backbone branches of our economy, which employ millions of people, millions of specialists. The growth and strengthening of these branches are decisive for developing entire regions and territories of our country, for improving living standards for our people.

I will also note low unemployment. In April, it was at the lowest historical level in Russia, and in May, the number of jobless, far from increasing, even decreased a little. In April, it stood at 4 percent, which is the lowest rate on record. In the current conditions, this is a very serious achievement, but I would like to ask you to keep the situation under control, considering that there are still risks in the labour market, of course.

Furthermore, we managed to control inflation. In annual terms, it reached 17.4 percent on May 27. Starting in the second half of May, prices stopped rising altogether, and inflation is zero now. But we must bear in mind that there are pluses in this and also a trap, an ambush, as people say. Therefore, it is necessary to analyse the situation very thoroughly and make timely decisions. In effect, this is what we are doing.

The situation in the currency market is also stable. The strengthening of the ruble made it possible to relax requirements for exporters. This primarily applies to the reduction of the mandatory sale of currency revenues from 80 to 50 percent. The sale period was extended as well. According to expert estimates and in your opinion, this should make it easier to conduct foreign trade, but I would like to draw your attention to certain risks in this area, too.

Also, during our previous meetings, I already mentioned the importance of supporting consumer demand and spurring its dynamics. In May, retail trade in nominal terms was up by 5.4 percent compared to the same period last year. However, adjusted to inflation, it declined in real terms. I would like to re-emphasise the importance of stimulating the end demand in the economy, to ensure the growth of individual incomes, and to provide businesses with additional liquidity and lending resources.

A number of decisions to this effect have already been made. On June 1, pensions and the minimum wage, as well as the subsistence wage, were increased by 10 percent, and as a result, many social benefits and payments have increased.

Companies in a number of sectors of the economy will be eligible for a deferment in paying insurance premiums for the second quarter of 2022. However, judging by the budget statistics – I discussed this with the Prime Minister not long ago – not all companies took advantage of this opportunity in May. Actually, less than half of that amount was used. We allocated 350 billion, but only 137 billion was used.

Let’s get to the bottom of this today. In any case, I want the Government, the regions, and our leading business associations to work more closely with the business and to convey in-depth information to the companies on the ground about who is entitled to deferred insurance premiums, how to exercise this right, and so on.

I would also like our colleagues from the Government and the Central Bank to pay attention to business lending and mortgage issuance, which are down despite the key rate cut and the recently launched lending-related state support programmes. Let’s discuss separately ways to increase the effectiveness of these measures.

In closing, work on the federal budget for the next three years is underway. The design of budget rules, which must not only ensure public finance stability, but also bolster the growth rate of the Russian economy, is a matter of fundamental importance. Clearly, flexible approaches and adjustments must be used. I want the Government to submit proposals regarding a new design of the budget rules by late July.

Let’s move on to reviewing the issues at hand. There is plenty to discuss, which we have been planning to do for a long time now….