Russian economy's reserves largely used up, macroeconomic situation more challenging than in recent years - Reshetnikov

VSEVOLOZHSK. April 17 (Interfax) - The situation in the Russian economy is more challenging now than in recent years due to the strong ruble, high interest rates, labor shortage and budget constraints, Russian Economy Development Minister Maxim Reshetnikov said on Friday in his speech at My Business, a nationwide business support infrastructure forum in Vsevolozhsk.

"Obviously, the situation in the economy is not easy - I won't keep repeating myself. I think that businesses are feeling this the most acutely. And the situation is, let's say, complicated in part by the changes to taxation that are being made right now and which businesses are being forced to adapt to. This is probably why our main task now is to truly help businesses to adapt as best they can to the ongoing situation," the minister said.

"As always, the situation when such structural changes occur, when there really are a lot of challenges, is such that some aspects bring new opportunities, while others businesses just have to get used to, and perhaps wind down some business areas, in order to transfer and partly reallocate the most scarce resource that we have in the economy now - namely, the work force," Reshetnikov said.

"Therefore, when we refer to structural changes, we are always referring to the fact that we need, of course, to create new jobs, to launch new production facilities, new investments and so on. This all needs to be done, it's true - on the whole, we have learned how to do this over recent years. But we learned to do this in conditions where, let's say, the labor market was fairly calm. When we understood that, yes, we obviously all do have a shortage of staff - of course, it's not easy to find staff, and salaries are rising - but nonetheless, we coped with all of that somehow because somewhere the economy there were reserves," the minister said.

"Our current records show that these reserves have largely been used up; this truly is the situation and the macroeconomic situation is substantially more difficult," Reshetnikov said.

"The Exchange Forum took place yesterday, and we talked once again about the fact that the [ruble] exchange rate is stronger - it is stronger now, and will be in the future - than what we would like and what was in our previous forecasts, and interest rates are quite high, too. Of course, it is great that they [the rates] are decreasing, but, considering the given budget situation among other things, they will probably decrease a bit less [more slowly] than we would like. And all of this will have an impact on businesses one way or another," Reshetnikov said, commenting on the challenges of the current macroeconomic situation.

He said that the main task faced by businesses in the near future would therefore be to "manage the cost of sales, manage expenditure, look for how to get the most out of the resources available, and how to ultimately raise labor productivity".

"Therefore, of course, the first task that we all have before us is probably to replicate as far as possible the methods and approaches that businesses currently have, the opportunities that IT gives us and that artificial intelligence gives us, in order to explain entrepreneurs how to raise their own efficiency and help them in this," Reshetnikov said.