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President of Russia Vladimir Putin: Mr Oreshkin, you have an economic performance analysis for the first half year. You have my full attention.

Minister of Economic Development Maxim Oreshkin: Mr President, I would like to report to you on progress in economic development. In principle, the figures are normal: GDP growth in the first half year amounted to 1.6 percent.

Investment activity increased by 3.2 percent. This is higher than GDP growth, which is a positive sign for future dynamics. In July the figure was 1.8 percent.

As for inflation, it was kept within the Central Bank’s limits. In August inflation increased and now stands at about three percent but our target is to keep it at four percent, so the dynamics are generally positive in this respect.

We have very good indicators on the labour market. Unemployment went down to 4.7 percent. Real wages grew by 8.7 percent in the first six months – a record since 2012. So the dynamics are positive in this regard as well.

Important events are taking place in foreign markets. As for countries with developing economies, the situation there is highly volatile.

For example, since the start of the year, the currencies of such countries as Argentine and Turkey lost half their value relative to the US dollar. There are some indications of a crisis in these economies.

All is not well in a number of other countries, such as South Africa, India and Brazil. Against this backdrop, the Russian ruble that has lost 15 percent of its value against the euro-dollar basket looks very stable.

There are two main reasons for this. We have a good general macro-economic situation and a balanced budget. We have a current account surplus and a moderate external debt. This ensures overall stability.

Secondly, we have a working mechanism for withdrawing windfall oil profits that was launched last year. Using this mechanism, the Central Bank has now stopped the purchase of currency and the market supply increased by about six billion dollars per month.

This is obviously making the market stable. There is capital drain on the market of government securities. About 300 billion rubles were lost in the past few months. They were withdrawn by foreign investors. But all this allows us to keep things in balance, and on the whole the situation is stable.

We have also completed our work on a six year forecast that projects a growth rate of over three percent by 2020–2021.

There are three key tasks that will allow us to do this – increase of investment activity by up to a quarter of GDP, growth of labour productivity that is not related to investment at all, and more positive dynamics of the economically active population.

Now a few words about the Government’s current work. Recently it adopted a plan on enhancing investment activities and will add details for different sectors. It is drafting national projects and planning a number of other socioeconomic changes. Everything is aimed at fulfilling executive orders, including those on economic growth.

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