Impact of sanctions and state support measures. What Putin said about the economy

The West has deployed not only a military, information, but also an economic front against Russia, said President Vladimir Putin during messages Federal Assembly. But in the end, the initiators of the sanctions punish themselves, he stressed. “They provoked price increases, job losses, plant closures, and an energy crisis in their own countries. They tell their citizens – we hear it – that the Russians are to blame for everything, ”the president said.

On the effect of sanctions

The West tried to disconnect Russia’s financial system from communication channels, deprive it of access to export markets in order to hit revenues, collapse the ruble and provoke destructive inflation, the president said. At the same time, according to Putin, the Russian economy and governance system turned out to be much stronger than expected in the West. Already in March 2022, a package of measures to support business and the economy was launched for a total amount of about 1 trillion rubles, the head of state pointed out.

The decline in GDP at the end of 2022 amounted to 2.1%, although back in February-March Russia predicted a collapse of the economy by 20-25%, Putin said. According to him, Russian business has rebuilt logistics and strengthened ties with predictable partners, while the share of the ruble in foreign trade settlements has doubled and amounted to a third, and together with the currencies of friendly countries – more than half.

“We will continue to work together with partners on the formation of a stable, secure system of international settlements, independent of the dollar and other Western reserve currencies, which, with such a policy of Western elites and Western rulers, will inevitably lose their universal character,” he stressed.

The Russian economy has overcome possible risks. “Many risks could not be calculated in advance, it was necessary to respond literally from the wheels as problems arose. Both at the state level and in business, decisions were made as quickly as possible,” the president said.

New stage of development

Russia has actually entered a new cycle of economic growth, Putin believes. “New promising global markets are coming to the fore, including the Asia-Pacific region, our own domestic market, scientific, technological, and human resources. Not the supply of raw materials abroad, but the production of goods with high added value. This makes it possible to unlock the enormous potential of Russia in all spheres and areas,” he said.

This year, he said, a significant increase in domestic demand is expected. Russian companies will take advantage of this opportunity to increase the production of the most sought-after products and fill the niches that have been vacated after the departure of Western companies, Putin is sure.

The government has an understanding of what structural problems need to be addressed in logistics, technology, finance, personnel, the president added. “We have talked a lot about the need to change the structure of our economy in recent years, and now these changes are a vital necessity,” he said.

President’s initiatives

Putin, during his message, proposed expanding the maternity capital program to new regions – the Donetsk and Lugansk People’s Republics, Zaporozhye and Kherson regions. Families in which children were born since 2007 will be able to apply for it, he explained.

In addition, from January 1, 2022, it is planned to index the minimum wage by an additional 10%, Putin said. Thus, it will grow by 18.5% and amount to 19,242 rubles. The President also took the initiative to increase the social tax deduction for the education of children from 50,000 to 110,000 rubles, for their own education and treatment – from 120,000 to 150,000 rubles.

Separate solutions, he said, are needed to raise capital in high-growth high-tech companies. They will receive support when placing shares on the domestic stock market in the form of tax incentives, Putin assured.

In addition, the president proposed establishing twice as much insurance coverage for voluntary pension savings as for deposits – in the amount of 2.8 million rubles.

Also, Russian companies that purchase domestic IT solutions and products with artificial intelligence will be able to count on a reduction in income tax payments, the president said.

Putin also stated the need to return to the issue of revising a number of norms of criminal law in terms of economic offenses and move more actively towards their decriminalization. “Of course, the state should control what is happening in this area. It is impossible to allow permissiveness here, but there is no need to go too far,” he noted.

In addition, the president called for deoffshorization, pointing out that businesses, primarily in key sectors of the economy, should operate under Russian jurisdiction.