Russian economy on path to growth – Putin

The West’s economic ‘blitzkrieg’ has failed, according to the Russian president

The Russian economy is currently stabilizing and turning to a growth path, President Vladimir Putin said on Monday at an economic meeting, citing monthly dynamics of key macro indicators.

According to Putin, the country has managed to tackle inflationary pressure and prevented the economy from entering a severe economic slump.

“Russia is confidently coping with external pressure, and financial and technological aggression from some countries. The tactics of economic blitzkrieg, the onslaught they were counting on, did not work,” he said, adding that contraction of the nation’s economy has slowed to 4.3%, while economic activity is growing.

Putin highlighted that the rate of inflation dropped to 14.1% after reaching its peak in April, adding that further decline to about 12% is expected by the end of the year. He added that unemployment in the country is at an historic low of 3.9% in May-July, while contraction in the industrial sector in July totalled 0.5%.

According to Putin, the process of de-dollarization of the Russian economy is inevitable.

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The process of de-dollarizing the Russian economy began in 2014, when Western nations introduced the initial sanctions against Moscow over Russia’s reunification with Crimea, which was formerly part of Ukraine. The latest penalties imposed this year have sped up the process after over $300 billion in Russian foreign exchange reserves and other assets were frozen by the US and its allies. 

“Western countries have undermined the foundations of the global economic system. There is a loss of confidence in the dollar, the euro and the pound sterling as currencies in which to conduct transactions, hold assets and reserves,” President Putin stated last week at the seventh annual Eastern Economic Forum in Vladivostok.

He also noted that this tendency pushes Russia and many other nations to switch to other currencies, most notably the Chinese yuan.

“Step by step we are moving away from the use of these unreliable, compromised currencies. And by the way, even US allies are gradually reducing their savings and payments in dollars, according to statistics… I will note that yesterday Gazprom and its Chinese partners agreed to pay for gas in rubles and yuan in a 50/50 split,” Putin said.

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