Russian govt limiting growth of public sector lending to prevent it from squeezing out private investment - economic development minister

MOSCOW. March 4 (Interfax) - The Russian government is restricting the growth of lending in the public sector to ensure it does not outpace private investment, Economic Development Minister Maxim Reshetnikov said when speaking at the State Duma Economic Policy Committee.

The efforts of the Economic Development Ministry are focused on three key tasks, he said.

"The first is joint cooperation with the Central Bank of Russia and the Finance Ministry to ensure macroeconomic stability. We are working with the Central Bank and the Finance Ministry on aligning monetary and fiscal policy. We are assessing the volume and structure of lending. We are managing the expansion of lending in the public sector, which in this case means we are limiting this growth to ensure that state-owned companies' borrowing does not outpace private investment and reduce their available space," he said.

The government and the Central Bank are seeking "a balance between curbing inflation and economic growth," he said.

"Secondly, we are mitigating risks in certain industries due to the effects of tighter monetary policy. We monitor the financial condition of economic sectors to prevent projects from coming to a halt," Reshetnikov said. This work is being carried out within a special government commission on sustainable development, he said.

"Thirdly, we are implementing a number of economic policy measures to enhance the potential for economic growth," he said. These measures focus on stimulating investment and technology, increasing supply, addressing labor shortages and developing the financial market. "The solution to these tasks is embedded in the new national economic project," Reshetnikov said.