Vladivostok, Russia (Reuters) – Russia will post a budget surplus this year, President Vladimir Putin said on Wednesday, with the economy expected to contract as it overcomes the worst impact of Western sanctions The magnitude will be much smaller than previously expected.
Putin is more optimistic than his economy ministry and Russia’s two biggest banks on a GDP decline of around 2%, but the impact of sanctions on Moscow is improving as Russia moves in Ukraine Forecast trends, analysis.
“Our national finances have stabilized. I would like to point out that this year’s budget will be executed with a surplus of nearly five trillion rubles, approximately in 485 billion rubles (7.93 billion dollars), Putin said at the Eastern Russia Economic Forum in Vladivostok.
Putin said budget spending has increased % from last year’s level, which he said is bound to have an impact on the economy.
“Our Experts believe that the peak of the difficult situation in our country is over,” Putin said. “The government can prevent a negative turn of events through effective, dynamic and calibrated measures. “
Russian Economy Minister Maxim Reshetnikov said on Tuesday that the economy will contract by 2.9 percent this year, smaller than previously forecast. Top banks Sberbank and VTB are expected to respectively Contractions of 4.5% and 4%.
The collapse may have been avoided – the Ministry of Economy at one point predicted that the economy would shrink by more than this year) %, outpacing the decline in output after the collapse of the Soviet Union and 1998 during the financial crisis – but for many, economic hardship remains.
Consumer prices have risen sharply this year, and a survey by state pollster VTsIOM shows that 64% of Russians have no savings as of mid-year – February.
Putin acknowledged the challenge despite claiming that Russia was dealing with what he called “the economic, financial and technological aggression of the West.”
” Of course we see problems in some industries and regions, in some companies in the country, especially those that rely on European supplies or to provide products there,” Putin said.