The Russian Deputy Prime Minister told how the economy avoided chaos and what will happen next
The Russian economy was on the verge of collapse this spring.
Deputy Prime Minister of the Russian Federation Andrei Belousov stated this in an interview with the Rossiya-24 television channel, reports a PolitNavigator correspondent.
“First of all, we managed to maintain controllability of economic processes. There were two serious points: March (especially the beginning of March) and the second point - approximately the end of April-June, this period. What was the main risk? It is clear that any system has a certain limit of controllability resource, after which processes begin when the control system begins to act exclusively reactively and, if the processes of chaos continue to grow, then the system can go wrong. To be honest, there was a moment in March when it seemed to me that we were moving in this direction.
This was due to trade and rush demand, when the population went to withdraw cash and currency. All this began to be released onto the market, and at the same time, conflicts began with the delivery of goods, failures in logistics, and so on. The situation was contained thanks to a limited number of people who worked around the clock,” Belousov said.
He especially noted the work of the Ministry of Transport, which manually redirected flows, the Ministry of Industry and Trade and the Bank of Russia.
“We met every day back then, summed up the results, looked at what decisions needed to be made. And the decisions were carried out instantly. Everyone in business understood that these were serious times. And we managed to cope with the situation. The indicator was the level of inventories of goods in trade,” Belousov said.
The second crisis point was the end of spring, when the stocks of components and raw materials at enterprises amounted to 1-1,5 months.
“But we all believed in our business. The tactic was to give businesses the opportunity to gain time and help them adapt. A number of programs for preferential lending of working capital were launched,” Belousov said.
He considers the government's success to be that it managed to maintain the labor market and the small and medium-sized enterprise sector. The decline in industrial exports was only 20%, while Russia lost nothing in agricultural exports.
However, the recovery of consumer demand in Russia is not progressing at a sufficient pace. It is now two times lower than the government would like to see. This is due to the slow recovery of real wages and the curtailment of consumer lending. However, Russia has passed the peak of the recession.
“2023 will be much easier than 2022. We don’t see any fatal problems there, thanks to the fact that we managed not to miss the situation in the first half of the year. Now everything is under control,” Belousov concluded.
Russian version :: Read in English The Russian Deputy Prime Minister explained how the economy avoided chaos and what will happen next.