Mikhail Mishustin: “The period of adapting to external challenges has largely passed. Based on the results of this year, we expect the Russian economy to grow. Over the first nine months, gross domestic product grew 2.8 percent. This is the preliminary figure from the Ministry of Economic Development.”
Mikhail Mishustin’s opening remarks:
Meeting on economic issues
Good afternoon, colleagues.
Today we will discuss the current state of affairs and possible risks that may hinder socioeconomic development.
The period of adapting to external challenges has largely passed. Based on the results of this year, we expect the Russian economy to grow.
Over the first nine months, gross domestic product grew 2.8 percent. This is the preliminary figure from the Ministry of Economic Development. If we take September separately, it was almost twice as high – more than 5 percent in annual terms.
These dynamics were made possible by the Government’s implementation of the President’s instructions, its work to solve urgent and strategic tasks, and its targeted support for many important industries and enterprises and, of course, our citizens.
By the middle of the year, the economy had almost completely recovered to the pre-crisis level. The oil and gas sector is still a bit down. Export routes were developed there for decades, with huge investments made and enormous resources and forces involved. And of course, we need more time to redirect supplies, agree with new buyers and find new markets.
But we can also see changes here. Coal production is growing – over 2 percent year over year in September.
Domestic production, as well the creation of a supply-side economy, is making a significant contribution to the overall GDP dynamics. The Government is engaged in this matter following the President’s instruction. Between January and September, the production of industrial goods increased by more than 3 percent.
As we repeatedly said, the main driver here is the processing industry. Over the first nine months, it has grown by 7 percent.
For the fifth month in a row, the main support has been provided by machine engineering with an increase of over 22 percent. Together with chemicals and metallurgy, these three areas account for almost 90 percent of the expanded production of processing industries.
There is also double-digit growth in sectors such as computers, electronics, optical products, electrical equipment, furniture, and several others.
This increase in the supply of Russian-made products means higher fiscal revenue, which is critical for the successful implementation of numerous social programmes. Non-oil and gas revenues have grown by almost 30 percent from January to mid-October 2023 as compared to the same period a year earlier.
Trade is up as well. Retail trade has been up by over 3.5 percent in the span of eight months, while wholesale trade has increased by more than 6 percent.
Internationally, Russian exporters are finding new areas of support. We discussed this not long ago at the Made in Russia forum. A clear trend toward deepening cooperation with friendly nations has emerged, despite the ongoing pressure from the West. According to the Ministry of Economic Development, trade with these countries increased by 22 percent from January to August.
Additionally, a responsible approach to fiscal policy has played a significant role. The draft budget for the next three years includes principles such as not only ensuring the funding of all existing commitments but also addressing new priorities, providing social support to the most vulnerable groups, strengthening national defence, and integrating new regions, as well as advancing technology and expanding infrastructure. All of these principles are adequately resourced and accounted for in the country’s fundamental financial document.
The draft budget has been approved by the State Duma in the first reading, with the second reading scheduled for mid-November.
The job market remains stable, with the unemployment rate hitting again its all-time low of 3 percent in August. While this shows that more people enjoy a steady income to support themselves and their families, there is also a downside in that the growing economy needs more specialists.
Colleagues,
We have reached a decent pace of growth, especially when compared with the negative forecasts from not too long ago.
To sustain this momentum and uphold positive changes, it is imperative to closely monitor not just the current status of specific industries and enterprises but also changes in the external environment and to respond promptly to potential new challenges and associated risks and to effectively mitigate these risks to ensure that they do not hold us back.
