Ensure growth: Putin instructed to consolidate the positive dynamics in the economy

There has been a positive trend in the Russian economy: after the February recession, Russian GDP grew by 1.8% in March. Vladimir Putin said this on May 15. Such results were achieved thanks to the measures taken by the Government. The Head of State instructed the Cabinet of Ministers not to stop there and do everything to make growth more sustainable. Experts warn that external risks still remain, but Russia has a margin of safety: in particular, it has accumulated reserves and alternative logistics corridors.

Reversal of the negative trend

Vladimir Putin called a meeting with the government on May 15, where he returned to the situation in the country's economy. The entire industry bloc, including relevant ministers, representatives of the Central Bank and the Federal Tax Service, personally comes to such meetings in the Kremlin.

The Russian leader held the same meeting exactly a month ago, and then (as, indeed, in recent months) the president was quite alarmed by the decline in the country's macro indicators. They were mainly explained by seasonal and calendar factors.: GDP in January-February fell by 1.8%, with manufacturing, industry as a whole, and construction, a key area of the economy, going into negative territory.

At several meetings in a row, the Head of State drew the Cabinet's attention to the need to address this issue more actively, find out why the trajectory of macro indicators was below expectations, and also submit proposals for additional measures to resume economic growth. The March statistics reversed the trend: after the February recession, the economy returned to growth. GDP increased by 1.8%, industrial production by 2.3%, manufacturing by 3%, retail trade by 6.2%, and unemployment remained at a record low of 2.2%. Consumer activity also accelerated in March, and wholesale trade grew by 8%.

— I would like to note that the measures and decisions implemented recently by the government of the Russian Federation have begun to produce a certain, let's say, restrained, but nevertheless a certain positive result. This is evidenced by the positive statistics for March of this year," the president said.

The Head of State asked to continue to pay priority attention to the issues of supporting economic growth. It is necessary that the emerging positive dynamics consolidate and cover more and more industries and sectors. "That is, so that economic growth becomes more solid and sustainable," he stressed.

Are there any risks of a downturn in the economy in the future

March was a significant month: after the restrained figures at the beginning of the year, the economy is showing recovery growth, which indicates the effectiveness of the measures taken, Olga Popkova, managing partner of the Goldman and Po communications agency, is confident. Fiscal policy remains focused on supporting the real sector, and targeted incentive measures allow resources to be directed to where they have the maximum effect. So the positive dynamics in March is the result of a combination of measures launched by the government.

Three blocks of solutions made the biggest contribution to the growth, Olga Popkova explained. The first is the expansion of government orders and support for related industries: mechanical engineering, electronics, pharmaceuticals. The second is targeted subsidies and preferential loans for priority sectors, primarily agro—industrial and manufacturing complexes. The third is the indexation of social benefits and the growth of nominal salaries, which supported consumer demand and ensured a steady growth in retail trade.

The main contribution to the increase in industrial production was made by the implementation of state programs, including orders for the military-industrial complex, said Andrey Glushkin, Managing Partner of the Main Division, member of the Council of the MRO Delovaya Rossiya. It was this segment that became the locomotive that provided the positive dynamics. At the same time, systematic work on import substitution — especially noticeable in the segments of transport equipment (+32.6%) and electronics (+8.7%) — forms an additional foundation for growth, Olga Popkova emphasized.

Consumer demand has revived due to a slowdown in inflation, an increase in real incomes (+2.6% in the first quarter), an increase in the minimum wage to 27,093 rubles from January 1, and the indexation of pensions for working pensioners. Tax breaks for SMEs (VAT exemption for catering at the USN, benefits for sole proprietors who exceeded the VAT limit) allowed businesses to adapt to new conditions.

The labor market remains stable near historical lows. Unemployment in March was 2.2%, which is one of the lowest levels in the entire history of observations, experts noted. Government retraining and employment support programs create an additional buffer for the sustainability of the labor market, forming the basis for maintaining high employment rates in the future.

At the same time, external risks, according to analysts, remain at the moment, but Russia has a margin of safety: reserves have been accumulated, alternative logistics corridors are developing, and trade ties with friendly countries are strengthening. While maintaining the current course, the economy has the resources to keep up the pace.