MOSCOW (Sputnik) — The president added that Russia needs to solve basic problems to revive the economy, otherwise it would be further showing zero growth.
"However, I want to stress that stabilization does not mean automatic transition to a sustainable growth, if we do not solve the basic problems of the Russian economy, not bring in full force the new growth factors, we can get stuck at the zero level for years. It means we will have to be constantly squeezed, save money, postpone the country's development, and we cannot afford this. We have another path."
Regarding the expected year-end inflation figure for 2016, the president said it may be below the previous record low of 6.1 percent seen in 2011.
"Next year, we can, in fact, reach the target mark of 4 percent. This is a great prerequisite for achieving substantial growth on the basis of a healthy economy."
"We expect inflation to significantly fall this year. It will be less than 6 percent… As you recall, inflation was 12.9 percent in 2015. I hope that this year it will not be above 6 percent and come to about 4.8 percent. The tendency is obviously positive and significant."
Russia's consumer prices rocketed in late 2014 as the ruble plunged twofold against international currencies, with inflation reaching almost 17 percent in monthly year-on-year terms by early 2015. Inflation rates later declined, falling below 8 percent by early 2016. The Economic Development Ministry forecast stands at 6.4 percent for 2016.
The Russian Central Bank has implemented a tight monetary policy with the aim of reach the 4 percent inflation mark by late 2017. In May, Central Bank Governor Elvira Nabiullina said the target was achievable and stressed that reducing interest rates prematurely could spur inflation without encouraging growth.
Russian Gov't Should Work out Plan of Economic Development Until 2025 by May 2017
Russian President Vladimir Putin ordered the government to draft a detailed plan of development that would jump-start Russian economy until 2025 by May 2017.
"I am ordering the government to work out, with the help of the leading business groups, to work out by no later than May next year a detailed plan until 2025, whose implementation will allow the economy to grow as early as in 2019-2020 at a faster rate than the world average."
Development Agenda Becoming Priority
Russia has not only been thinking of how to survive in recent years, but has also been creating a development agenda, which is now coming to the fore, Russian President Vladimir Putin said.
"Overcoming the current difficulties, we created a base for further progress, we have not stopped working on the development agenda, which is extremely important."
"Today this agenda is becoming a priority, is coming to the fore," he said.
Careful Changes in Economy to Avoid Imbalances
Any changes in the Russian economy should be carried out carefully in order to avoid imbalances and "bubbles," Russian President Vladimir Putin stated.
"Any changes must not lead to the emergence of macroeconomic imbalances and the inflation of the so-called bubbles in the economy. It is very important to support small business loans, since it still continues to shrink."
Tax System Adjustment
Russian President Vladimir Putin called for a detailed and comprehensive consideration to adjust tax system in 2017.
“I call for a detailed and comprehensive consideration of the suggestion to adjust tax system in the course of the next year. It must be done with a participation of business associations.”
Russia Must Actively Fight for Foreign Markets as Global Trade Barriers Grow
Russia should more actively fight for foreign markets as protectionism and trade barriers are growing around the world, Russian President Vladimir Putin stated.
"In general, we have a good potential to increase non-resource exports. But unfortunately we see protectionism growing around the world. Trade barriers are being built as well. We recently met with colleagues in Peru, Lima, and spoke of global trade problems. One of the main problems is the growth of protectionism," Putin said.
"What does it mean to us? It means we need to fight for access to foreign markets more actively and decisively," he said.
Professional, Accurate Economic Development Forecast
Russian economy is in need of professional, accurate economic development forecast, but not vague scenarios, Russian President Vladimir Putin underlined.
"We are already conducting deliberate changes in the structure of economy, updating the existing sectors and forming the new ones, establishing modern companies, which are able to work on the global markets. It is necessary to move in this direction in a systematic and offensive way. Professional and accurate economic development forecasts are needed, but not abstract scenarios," Putin said during his annual address to the Russian parliament.
Basic Science Should Serve as Economic Growth, Social Development Factors
Basic sciences should serve as one of the factors of economic growth and social development in Russia, President Vladimir Putin added.
"Basic science should serve as a powerful factor in the accumulation of scientific and technological groundwork for economic growth and social development."
To that end, Putin said centers of competence would be created next year on the basis of leading higher education institutions, including in the regions.
"They are intended to provide intellectual, professional support to projects related to the formation of new industries and markets," he stressed.
