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Meeting on economic matters

December 9, 2020, Novo-Ogaryovo, Moscow Region

The President chaired an online meeting on economic matters.

The meeting was attended by 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 Kirienko, Deputy Prime Minister Tatiana Golikova, Presidential Aide Maxim Oreshkin, Minister of Labour and Social Protection Anton Kotyakov, Minister of Agriculture Dmitry Patrushev, Minister of Economic Development Maxim Reshetnikov, Minister of Finance Anton Siluanov, and Governor of the Central Bank Elvira Nabiullina.

* * *

Opening remarks at the meeting on economic matters

President of Russia Vladimir Putin: Colleagues, good afternoon.

We have agreed to meet regularly in order to closely monitor in real time the situation in the national economy and the main trends.

Let me emphasise that this is not just about macroeconomic parameters, which are certainly very important, and vital for our decision-making, they are the foundation on which all of our work is built, figures that describe the current state of affairs. However, we also need to talk about extremely important issues that are sensitive for every Russian family, for every citizen in our country – employment, income, and prices, primarily of basic goods.

What is the situation here? Revenue – I know, unfortunately, it has decreased this year. The labour market is under some strain, and unemployment is up: from 4.7–4.8 percent, it rose to 6.8 percent, then subsided slightly, to 6.3, which is better than, say, the United States, and it is even higher in the euro zone.

But what about other indicators, such as the rise in prices, primarily those of basic foodstuffs? The pandemic has nothing to do with that. The first two can be easily explained by the decline in production and the decrease in the workforce. Nobody likes a decline in income – I can assure you, and you know this, but people still understand that this is happening due to the objective difficulties occurring not only in our country, but around the world. What people assess is our response – the effective or not very effective actions by the authorities in response to what is happening in the global and the national economy as part of this global economy. This cannot be helped and we all know it.

But growing prices of basic foods cannot be explained by just the pandemic. What does the pandemic have to do with it? Take granulated sugar. The Minister of Agriculture has just reported that Russia’s production is enough to meet domestic demand. So why have prices increased by 71.5 percent? Thankfully, there is some stabilisation in this respect, I am being told. But the price of sunflower oil has grown by 23.8 percent and it continues going up; flour is up 12.9 percent, pasta products – by 10.5 percent and bread and flour products – by 6.3 percent. Why is this?

Of course, there is an explanation. This is caused by the cost dynamics in the world markets, an attempt to bring domestic prices up to global levels to match and use export opportunities.

I mentioned at our previous meeting with the Government, how it was in Soviet times when everything was available but there was not enough for everyone. Now, everything is available but not everyone can afford it.

Look, we know what must be done in this situation. We know what instruments to use to keep prices at bay, at least on these items. We simply need to respond promptly to what is happening.

I think we must review all these issues calmly at our meeting today. Please note that I expect you not just to offer proposals on this subject but to outline specific measures and deadlines for adopting them and, most importantly, reaching the desired effect.

Inflation recently exceeded the targeted forecast of the Central Bank – it is now 4.4 percent based on the November results, whereas the targeted figure was about 4 percent.

Naturally, this was brought about by a number of objective factors including operations difficulties at companies during the pandemic and the weakening of the ruble. We discussed this issue at our meeting in October and agreed that the Government would meticulously analyse this problem.

Let us discuss the proposals in detail today. Let me emphasise that any adopted measures must be thoroughly analysed. It is necessary to consider the possible impact both on the current business atmosphere and on business development plans.

And, of course, the main point is the interests and welfare of our citizens. Therefore, all decisions must be balanced, and, I would like to stress it again, timely.

Another issue on the agenda that I have also already mentioned, is the employment situation. High unemployment is one of the key challenges today, not only for our country, but for almost the entire world. This is a serious negative factor in terms of income – for Russian families, in this case.

This year, during the epidemic, we took a range of business support measures. The basic criterion was, first of all, that we supported primarily companies and businesspeople who took responsibility for their teams, for keeping their people employed.

I can state with confidence, this approach has largely helped to minimise the negative impact of the pandemic and the ensuing restrictive measures on the labour market. I can say that the Government made some positive decisions in a timely manner, and that played a role. Again, overall, those measures have worked.

After peaking in August, unemployment rates began to subside. As I said, it is in around 6.3 percent now – down from, I think, 6.8. I would like to note that this is obviously better than – I would like to emphasise this again – better than in many other countries, including the developed economies.

At the same time, unemployment in our country is still not declining quickly enough. The rate is too slow to announce a drastic change in the situation.

Worse still, with the epidemiological situation aggravating in November, there is a new risk of further deterioration in labour market dynamics.

Allow me to remind you that the Government has been tasked with restoring employment in Russia to its 2019 level by the end of next year.

I am sure that the task is perfectly realistic, and I would like to hear your proposals today on additional solutions to improve the labour market situation, the mechanisms or tools you think need to be used.


December 9, 2020, Novo-Ogaryovo, Moscow Region