DREAM / The Prime Minister resigns and wakes up under the Parisian bridge!

 Kliko këtu për të tjera
Voxpress:

Russian economy to shrink by 11 percent, but Moscow predicts business adaptation within two years

2022-04-18 18:02:24Biznes SHKRUAR NGA REDAKSIA VOX

Russian economy to shrink by 11 percent, but Moscow predicts business adaptation

Russia on Monday warned of a possible further interest rate cut and more budgetary spending to help the economy adapt to strong Western sanctions, as the economy is heading towards its deepest contraction since 1994.

Russia has recorded rising inflation and capital departures, while facing a possible default on debt after the West imposed unprecedented sanctions to punish President Vladimir Putin for the war launched in Ukraine on February 24.

Putin said Monday that Russia should use its state budget to support the economy and liquidity when lending activity has faded. The World Bank expects the Russian economy to shrink by more than 11 percent this year.

The central bank doubled its basic interest rate by taking it to 20 percent on February 28 when the first wave of sanctions hit, before reducing it to 17 percent on April 8. It is expected to lower it further at the next board meeting on April 29. .

"We need to have the opportunity to lower the base rate faster," Central Bank Governor Elvira Nabiullina said Monday. "We need to create conditions to increase the availability of credit to the economy.

Although inflation in Russia has accelerated to its highest level since early 2002, the Russian central bank says it "will not try to lower it by any means| as it would prevent business from complying with sanctions.

Current inflation growth is caused by low supply, not high demand, and the central bank aims to bring it to its 4 percent target in 2024 as the economy adjusts to Western sanctions, she said, speaking in the lower house of parliament.

"The period when the economy can live with reserves is over and already in the second and third quarters we will enter a period of structural transformation and the search for new business models", Nabiullina said.

She also said Moscow plans to take legal action to block gold, currency and belonging to Russian residents, while added that such a step would have to be thought through carefully.

Foreign sanctions have frozen about $300 billion of the approximately $640 billion Russia had in its gold and currency reserves when it launched what it calls the "special military operation" in Ukraine.

Putin, speaking to Nabiullina and other senior government officials through a video link, called for an acceleration of the process of switching to national currencies in foreign trade to cut off dependence on the dollar and euro.


Në përputhje me standarded JTI

Video

SHIKO KANALIN NE YOUTUBE
×