8 Sep 2022 13:49

Peak of decline in consumer demand in Russia has passed - Mishustin

MOSCOW. Sept 8 (Interfax) - The Russian economy is gradually adapting to new realities, no deep recession has happened, and the peak of consumer demand decline in Russia has already passed, Prime Minister Mikhail Mishustin said at a panel session of the Moscow Financial Forum on Thursday.

"The economy is gradually adapting to the new realities. Some slowdown in trends was inevitable, of course, but it has not turned out to be devastating, as those who initiated sanctions envisaged," he said.

"According to the estimate by the Economic Development Ministry, in January-July Russian GDP declined by just over 1% relative to the same period in 2021. And then our economy was growing ahead of the curve, recovering from Covid-19. By comparison, the drop in GDP during the global crisis of 2009 was seven times greater. And then there were no external restrictions," Mishustin said.

"Indicators in industrial production, agriculture and construction remain in positive territory. According to estimates, the peak of the decline in consumer demand has already passed. By the way, July was the third month when the unemployment rate was at a historic low of 3.9% of the economically active population," he said.

"Contrary to initial fears - investment has risen. In Q2 of this year, investment in fixed capital in the full range of organizations increased in real terms by 4%. The greatest contribution came from manufacturing industries, especially export-oriented industry. Business did not react as the authors of the sanctions intended. Basically entrepreneurs did not stop, but on the contrary, sought to continue investment programs, where possible," Mishustin said regarding the situation with investments.

"It was predicted that we would enter a deep recession. However, that did not happen either. We are successfully responding to emerging challenges. And obviously, we will emerge from the current situation even stronger and better prepared," the prime minister said.