Putin Says Russia Cannot Grow in Isolation

The Russian economy is an integral part of the global economic system and should not develop in isolation from it, President Vladimir Putin has said. 

“We have never believed and we should not believe that we must develop our economy in isolation from the global economy. The Russian economy has already become an integral part of the global one and it should develop this way,” Putin said at a meeting with the workers of the Chelyabinsk Pipe-Rolling Plant on Monday evening, news outlets reported. 

He added that import substitution is more beneficial for the country and contributes to creating new workplaces and high-tech production. He urged the Russian Export Center to work effectively to support the country’s export. 

“We are capable of providing ourselves and even the growing needs of the Russian economy and our contracting partners,” the head of state said.

The Russian economy suffered a setback in 2014 as a result of Western economic sanctions and low global oil prices. The ruble lost about half of its value against the US dollar, and the country’s GDP fell significantly.

Russia’s economy is recovering and will return to growth in the first quarter of 2017, the central bank’s first deputy governor Ksenia Yudayeva said on Tuesday, adding the bank was confident of hitting its inflation target next year. The central bank holds its next monetary policy meeting on Dec 16.

“We see recently encouraging signs in the economy, recent PMI data was very strong, Rostat has just published its indicator of business sentiment, which was also very strong,” Yudayeva said. “I think there will be positive growth in Q1.”

Growth was flat to slightly positive in the third and fourth quarter of this year, Yudayeva told Reuters in an interview on the sidelines of an investment conference organized by the Moscow Exchange in London.

Yudayeva also said she was confident the bank’s inflation target of 4% by end-2017 would be met, but added that inflation expectations were “high and not anchored.”

Talking about the bank’s oil price forecasts, she said policy makers were due to discuss it in the next two weeks. She noted that the bank had two scenarios—one of oil prices of $40 per barrel and another one of up to $55. “The probability of the second scenario has increased somewhat,” she said.