Unaffordable crane: Putin said about the risks of reducing the pace of construction

Inflation in Russia remains high and is more than 10%. Vladimir Putin said this on April 24 at a meeting on economic issues. The Head of State added that this year's GDP growth is projected to be slightly lower than last year. In January-February 2025, it amounted to 1.9% in annual terms. The President instructed to ensure stable economic growth rates with reduced inflation and low unemployment. Separately, at the meeting, they took care of the problem of reducing the pace of construction in Russia: This issue requires special attention from the authorities, Vladimir Putin said. What is the budget deficit of the Russian Federation and why is the loan portfolio of banks decreasing — in the material of Izvestia.

Indicators of the Russian economy in 2025

On April 24, Vladimir Putin convened a meeting on economic issues, where he assessed trends in the real sector, finance and the service sector. The President has set a difficult task for the government's economic unit — to ensure stable growth rates while reducing inflation and maintaining low unemployment.

— A constant, substantive analysis of the current economic situation is extremely important. He is always in our field of vision, especially now, when the international economic situation is objectively becoming more complicated, when commodity and financial markets are experiencing serious fluctuations due to the intensification of global competition," he said.

According to the president, in January-February, GDP growth amounted to 1.9% in annual terms. At the same time, the manufacturing industry showed a more active pace: +5% in the first two months of 2025. GDP growth this year will be slightly lower than last year.

— We talked about the so—called "soft landing" to a certain extent, in order to maintain macroeconomic indicators and, above all, to overcome inflation, - the president specified.

But so far, inflation remains at high levels and exceeds 10%. "As I have already said, it is important to achieve a steady slowdown in price dynamics," Putin stressed.

Today, ensuring stable economic growth rates while reducing inflation is a completely solvable task, experts say. Especially if these rates are primarily generated in the real sector of the economy, noted economist Valery Korneev.

— They have allowed us to increase the pace of economic growth, primarily in the high-tech manufacturing industry. The production of new products, which is supported by both the budget and development institutions, will not only curb the growth of inflation, but also reduce it, since the growth of the commodity mass, and produced in Russia, will be faster than the growth of the money supply in the hands of the population, he added.

Separately, the president called for using the emerging opportunities in the world to develop their own production, exports and trade relations. This will allow the domestic economy to achieve progressive and dynamic progress under any external conditions.

The situation in housing construction

The President instructed to pay special attention to the housing construction sector, as the number of new projects launched by developers is gradually decreasing. Moreover, monitoring by the government's subcommittee on improving the sustainability of the financial sector and individual sectors of the economy shows that the most difficult situation is in housing and infrastructure construction.

Earlier, Nikita Stasishin, Deputy Minister of Construction and Housing, stated that "it has not been so difficult for the construction industry for a long time": as of March 1, 26% fewer projects were launched in the country, the lowest figure since 2021. The President said earlier that 2,000 projects had deadlines postponed by six months.

"This fact, so to speak, requires our special attention, since the pace of construction directly affects the availability of housing for citizens and, of course, affects the launch and utilization of related industries: from the production of building materials to the manufacture of furniture and household appliances," the head of state said.

Against this background, the president added that the loan portfolio of banks has also been declining since the beginning of the year. In the first three months of 2025, Russian banks reduced the volume of business financing by 680 billion rubles, and the population by 192 billion rubles. For the economy, the reduction in the loan portfolio was offset by an increase in federal budget expenditures, the president said. In total, this figure amounted to 2.2 trillion rubles in the first three months of this year, due to a 25% increase in expenses compared to the same period in 2024.

"They have been postponed to an earlier date, at the beginning of the year, so that both federal and regional authorities can launch national project activities faster, pay contracts, start construction, and allocate financing," the head of state said.

This partly applies to budget loans to the regions, which were allocated from the federal treasury and were conceived as a way to replace commercial bank loans, says economist Valery Korneev. In the 2010s, their subjects were forced to take on social and investment expenses to cover their obligations.

— Since this led to high costs for bank interest from regional budgets, the federal center decided to give loans to the regions for these purposes from the national budget at very low interest rates. And since the repayment of these loans to the federal center will again require another re—crediting, the federal government decided to stimulate economic activity in the regions by writing off these budget loans if the region itself directs them to pre-agreed goals, primarily for the development of its infrastructure and investment projects in the regions," the expert explained.

As a result, these costs lead to an improvement in the economy of the regions, which, in turn, increases the tax burden on their budgets and reduces the need for new loans from the federal treasury, the economist concluded.