Vladimir Putin held a meeting with the government on the implementation of the message to the Federal Assembly
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The government presented the president with the first reports on how the White House plans to carry out his instructions given as part of the message to the Federal Assembly. To achieve the set goals, as follows from yesterday’s meeting, the economy must grow at a rate of at least 2% per year with a gradual acceleration to 3% per year (which is higher than current forecasts) and by 2030 a total increase of 20%. The recipes for achieving such economic growth yesterday were generally already known – ensuring increased investment, increasing labor productivity, supporting industrial production, indirectly stimulating domestic demand through measures of social support for the population.
Yesterday, Vladimir Putin held a meeting with the government on the implementation of the measures of his message to the Federal Assembly (see Kommersant of March 1). As the president noted, by May the White House must decide on the basic principles for implementing new national projects starting in 2025. For now, the government (which, we note, will resign after the elections on March 15–17) has outlined general requirements: a holistic project management system, unification of all levels of government, digital control over the implementation of plans. According to the president, economic trends now “give reason to believe” that all plans are feasible: after GDP growth in 2023 by 3.6%, in January of this year it amounted to 4.6%.
The message stated that the Russian Federation could become one of the four largest economies in the world in terms of purchasing power parity (PPP, now in fifth place). The trajectory necessary for this in the White House had already been calculated by yesterday’s meeting. According to First Deputy Prime Minister Andrei Belousov, by 2030 the goal is achievable subject to sustainable GDP growth of at least 2% per year with a gradual acceleration by the end of the period to 3%. In total, he concluded, in the period until 2030 it is necessary to increase GDP by approximately 20%.
Analysts are so far more restrained in assessing the possible dynamics of GDP: the Central Bank consensus forecast updated on March 13 suggests GDP growth of 1.8% in 2024 and 1.5% in 2025–2026. The FocusEconomics consensus forecast, updated a little earlier, suggests economic growth of 1.8% this year, 1.3% in 2025-2026 and 1.2% in 2027-2028.
It is proposed to accelerate growth by expanding measures developed in recent years – increasing labor productivity, supporting non-resource, non-energy exports, ensuring investment growth (in 2023 it amounted to 9.8%, which is almost three times the size of the increase in GDP, the task is to maintain growth until 2030, noted Mr. Belousov). It is planned to stimulate capital investment by continuing work to ensure predictability of conditions for investors based on existing mechanisms, including almost doubling the number of agreements on the protection and encouragement of capital (from 67 worth 4 trillion rubles to 150 worth 7 trillion rubles by 2030 year), the use of the investment tax deduction mechanism, which allows reducing the regional part of the income tax.
It is planned to increase support for small and medium-sized enterprises (SMEs): expand financial measures, stimulate purchases of major customers from SMEs, simplify the creation of new businesses and access for start-up entrepreneurs to microloans, grants and umbrella guarantees. Other measures include ensuring the stability of the financial market, which, according to Andrei Belousov, will allow transforming savings into investments in the economy – its capitalization should reach 66% of GDP by 2030 (34% at the end of 2023). The implementation is based, in particular, on the recently launched long-term savings programs for citizens and new individual investment accounts.
Deputy Prime Minister Tatyana Golikova reported on plans for implementing the social block of the message, one of the most costly areas. Let us note that in many ways the social part of the message is focused on supporting domestic demand through increased income redistribution (presumably the introduction of a progressive personal income tax scale, increased deductions for the poor and linking income tax to the profitability of companies) in favor of fighting poverty and increasing citizens’ incomes. Among the plans is an increase in the minimum wage from 18.5 thousand to 35 thousand rubles. by 2030 and an increase in personal income tax deductions for children from 2025 for individuals with annual incomes of up to 450 thousand rubles, which will save a total of more than 35 billion rubles in families. in year. All this will also affect the rate of economic growth (for example, the Central Bank is already recording the impact of domestic demand on industrial activity, see p. 2).
In addition to stimulating demand, industry support is divided into two blocks: the production of a wide range of products will be encouraged through existing systemic measures (in particular, various preferential loans), and priority areas of technological sovereignty (chemical industry, production of machines, equipment and industrial robots) will be transferred to the format national project with the supervision of relevant deputy prime ministers.
In the social sphere, as follows from the words of Tatyana Golikova, plans also include increased payments to doctors and teachers from April. With the additional funds already promised as part of the message, more than 4 thousand medical facilities will be created by the end of 2030. According to her, “such high-quality infrastructural changes will make it possible to timely identify and begin treatment of life-threatening diseases, thereby saving about 1 million lives.” . Possible economic effects are also presented – the contribution to GDP “in terms of lives saved” could exceed 2 trillion rubles.
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