Tags: putin | russia | growth

Putin Sees 6 Percent Growth Despite Crisis

Monday, 29 Dec 2008 11:33 AM

Russia's economy suffered from a "negative dynamic" in the fourth quarter due to the global economic crisis but growth in 2008 will still be six percent, Prime Minister Vladimir Putin said Monday.

With the downturn already causing lay-offs and unpaid wages, Putin delivered a typically muscular call to his government to "fill the blood with adrenaline" and combat the crisis.

"Despite a negative dynamic in the fourth quarter, the Russian economy and social sphere will end the year on the plus side," Putin told a cabinet meeting.

"Growth in gross domestic product is expected to be around six percent," he said, adding that inflation would be around 13.5 percent.

Putin did not give any figures for growth in the fourth quarter of 2008 but his comments chimed with forecasts by many economists who believe Russia could now be experiencing a contraction in growth after a strong start to the year.

The financial crisis is expected to take a large bite out of Russia's growth rates, which have been consistently strong in recent years, reaching 8.1 percent in 2007 and 7.4 percent in 2006.

"Of course, in conditions of universal well-being, the will to work is nicer, more comfortable," Putin commented.

"But working in difficult conditions should not lead to stagnation, melancholy or pessimism."

"It must fill the blood with adrenaline. This is a mission and challenge to realise oneself, to prove one's effectiveness and professional capacities," he added.

Reflecting the mounting toll of the global economic slowdown, Health and Social Development Minister Tatyana Golikova said the registered unemployed total will rise to 2.1-2.2 million in 2009 from the current 1.5 million.

"The crisis has only just begun," Putin's liberal former economic adviser Andrei Illarionov told a news conference.

"The crisis has shown that the economic model of the last five-six years has failed," said Illarionov, who is known for his outspoken criticism of the Kremlin.

"This crisis is not linked to the global financial crisis, or the fall in the oil price. It's an institutional crisis."

Putin, who ceded the presidency to Dmitry Medvedev in May and rapidly moved to the post of prime minister, has been in the forefront of the fight against the slowdown with an anti-crisis programme.

Joining Putin at the cabinet meeting, Medvedev described the anti-crisis programme as "balanced" although "it is not ideal since there is no such thing as an ideal programme."

Putin has repeatedly insisted that there will be no sharp devaluation of the ruble amid the crisis, but the central bank over the last six weeks has gradually allowed the currency to weaken.

The bank on Monday allowed the 12th effective devaluation of the ruble since November widening the currency's trading band against the euro-dollar basket that serves as its benchmark.

The ruble has now lost around a fifth of its value since August.

Analysts expecting further weakening in the next weeks, but deputy central bank chief Alexei Ulyukayev has dismissed as "nonsense" rumours that a sharp devaluation was planned over the New Year's holiday period.

Copyright AFP

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Economy
Russia's economy suffered from a "negative dynamic" in the fourth quarter due to the global economic crisis but growth in 2008 will still be six percent, Prime Minister Vladimir Putin said Monday.With the downturn already causing lay-offs and unpaid wages, Putin delivered a...
putin,russia,growth
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2008-33-29
Monday, 29 Dec 2008 11:33 AM
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