MOSCOW, April 15 (RIA Novosti) – Russian President Vladimir Putin warned on Monday that the deepening global economic crisis was damaging the Russian economy, and ordered the government to find ways to prevent a recession.
“The global crisis is taking an even more dangerous shape, which inevitably affects us as well,” Putin said at a meeting with Prime Minister Dmitry Medvedev.
“This is how it was in 2008, and now we are witnessing the same thing. However, unlike our friends and partners in Europe and other parts of the world, the Russian economy is showing vitality and prospects of further growth," Putin said.
Putin and Medvedev agreed on Monday to set up a joint meeting of the Kremlin and government officials and advisers to come up with new mechanisms for tackling the risk of a recession.
Russia’s economy shrank almost 10 percent following the global economic crisis that began in 2008. It was saved from total collapse by heavy infusions of capital in the banking sector and industries that were hurt the most.
Recovery has been slow, at about 4 percent GDP growth annually, or half of the pre-crisis pace.
Russia’s GDP grew by only 3.4 percent last year, largely due to weak demand for Russian exports in Europe and faltering investment.
The negative trend worsened in the beginning of 2013, as Russia's GDP grew by a mere 0.9 percent in January, while in February growth rates dropped to 0.1 percent. Russia’s Economics Ministry had to lower its 2013 forecast for the country’s GDP growth to 2.4 percent from 3.6 percent.
The ministry also expects net capital outflow to reach $30-35 billion in 2013 compared with its original forecast of 0-$10 billion.
Add to blog
You may place this material on your blog by copying the link.
- LatinLettersOnlyRussian Government can create its own Economic Boom00:52, 16/04/2013The Bretton Woods agreement of 1944 was with Western Europe to accept paper US$ as Gold at $35/ounce.
It collapsed in 1971 and after nine years of relative extreme price inflation, Ronald Reagan was elected and started creating excessive national US Treasury Debt as a way of lowering domestic inflation and exporting US$ to Europe and Asia.
Because of the Gasoline Price inflation, US carmakers couldn't make fuel efficient cars, so the Japanese saturated the US carmarket with smaller & more reliable import cars that Americans preferred over domestic cars, thus bankrupting Detroit.
Reagan's national debt explosion caused corporate USA to ship every possible job overseas for lower labor costs; and now after 30 years of that we have mostly software and services jobs going to India, and factory jobs going to China.
The emergence of the Euro could have ended the US$ if Arab countries started pricing their oil in Euros instead of US$; but that hasn't happened yet.
Instead, the Euro has been restrictively issued to bankrupt factories and industries in the lower-cost labor markets on the fringes; and favor Germany and the Northern Countries: An exact reversal of what happened with the US$.
To repeat in summary; the process of the US fighting domestic price inflation by printing up Treasury Debt; led to factories and transferable services being relocated to cheaper labor markets of China and India.
The Euro did the exact opposite. Instead of high labor costs bankrupting Germany and the North, and all the jobs flowing south to Greece, Italy, or Spain, or even Eastern Europs, instead the Euro has been suffocated in a deflation to bankrupt industries in the low-labor cost countries; and to Germany's and the North's benefit.
However, the severity of the Euro deflation has paradoxically caused so many bankruptcies and debt crises that it's value is actually falling (or remaining stable) instead of appreciating in the forex markets.
Why on earth Japan and China have so much respect for holding US$ reserves is a mystery, but has nothing to do with any international political agreement like 1944 Bretton Woods.
If Russia can get China Japan and India to merge their currencies with Roubles or gold backing or anything other than the US$; why is the US$ and Euro seen as so important when almost everything is made in Asia and China now?
How to give Roubles domestic value to grow the Russian economy with internal gov't investment; instead of needing any international investment at all?
Perhaps you need help understanding what is Marxism, what is Capitalism, and what is Capitalism, with Government Help; which is actually what the US post-war prosperity was based on.
Government Subsidies and Economic Support is not Marxism; it is the lack of private property that causes the economic breakdown; plus the abuse of monopoly power.
It is impossible to believe how Russia can have ANY economic problems AT ALL; when their Government wants to fully develop the country?
This must be due to a mis-understanding of international or economic terms; the Euro crises are specifically engineered!!!
They want to bankrupt the peripheral countries and profit from that!
Please Russia, study the post-war USA better and understand how prosperous the Government Support made this country!
There are no barriers to developing the Russian economy if the gov't want's that.
The US gov't wants to destroy all US industry, and they are doing it on purpose; not by accident or misunderstanding.
Please don't be fooled, Russia; you can create your own economic boom, just like 1946-1969 USA if only the Gov't wills it!!!
Iran has been a central Russian ally in the Middle East, despite considerable tensions between the two. But by renewing dialogue with the West, the new Iranian leadership has chosen another direction. The shifting terrain in the region creates new strategic, political and economic challenges for Russia.