According to the head of Ministry of economic development Maxim Reshetnikov, in 2020 the inflation will not exceed 4%. During a meeting with the President the Minister also announced the gradual recovery of the economy as the lifting of quarantine restrictions. So, business activity increased from 67 to 71-72% from pre-crisis levels. Active support to the population and business have earlier measures taken by the government: payments to families with children, as well as preferential loans and tax breaks for companies and entrepreneurs. In addition, the government has already prepared and soon plan to introduce a new national economic recovery plan.

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  • © Vladimir Trefilov

In 2020, the level of inflation in Russia will not exceed 4%. On Tuesday, may 19, said the head of Ministry of economic development Maxim Reshetnikov.

“The situation on the price market at the moment and in the consumer market is really stable. The effect of the devaluation, which was, he by and large at the moment exhausted. It may not always be a good factor, but the fact that as a result of quarantine measures has been a contraction of demand, of course, had a strong anti-inflationary effect,” the Minister said at the meeting of Vladimir Putin with members of the government.

Reshetnikov also said that “the economy is starting to recover” as the lifting of quarantine restrictions. So, in some industries companies have already resumed work, and the most recent measure of economic activity in the country has risen from 67 to 71-72% from pre-crisis levels.

“If we talk about the economic recovery, the numbers of recent days show that the dynamics went up. We have restrictions so we can see it on the accepted solutions in industry, construction and agriculture. In the basic industries, all restrictions have been lifted, and we immediately saw in increase in the consumption of electrical energy, and in the growth of transportation by all types of transport”, — the Minister added.

In General, according to him, the level of “slump” the economy may be smaller than previously thought. However, for full recovery will take time, said the head of Ministry of economic development.

May 20, the Agency must submit updated macroeconomic forecast, and may 25, the national economic recovery plan.

Help the Russians

Earlier, the authorities announced new measures for combating the effects of coronavirus and support business and population. So, Vladimir Putin ordered from 1 June to introduce a single payment of 10 thousand rubles for each child from three to 15 years inclusive. As the President said during the meeting Tuesday, the proposed measure was “extremely popular”. As of may 18, parents received about 12 million applications.

“It is assumed that the total number of children for whom family will receive a payout will be about 22 million, and together with older family members, this support measure will affect if you take out a factor of 1.8, more than 50 million people in the country. And the amount of additional budgetary funds on these purposes is very large. Even in today’s difficult conditions, we managed to allocate 197,2 bln rubles,” — said Putin.

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  • © Konstantin Michalczewski

The President also recalled that the monthly payment in the amount of 5 thousand rubles for children up to three years extended to the families whose first child was born between 1 April 2017 and 31 December 2019. According to the labor Ministry, in total, should support about 5 million children.

“The payments will help the Russians to survive the difficult times associated with the spread of the pandemic and forced quarantine measures. At the moment, on the direct support of citizens is planned to allocate 6.8% of GDP, which indicates the willingness of the authorities to spend money from the reserve to mitigate the negative effects COVID-19. Particularly relevant payments will be for families with children where the parents ‘ income has significantly declined lately,” he told RT analyst CC “Finam” Alexey Korenev.

Credit question

In support of the business and level of employment from June 1 Russia will start to operate the program of preferential crediting of the enterprises of the most affected industries at the rate of 2% per annum. The money should go to pay salaries to employees at the rate of one minimum wage (12 130 rubles) per employee. Companies provide the loan of 85% will be secured by state guarantees. In this case, the loan can be fully or partially written off if employers retain jobs.


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“The potential scope of this programme, companies employing 7 million people, and we expect that at least half of these companies use specified measure,” Mr Reshetnikov said.

An additional business has also had a program of subsidizing of loans. So, banks have to offer loans for a period of 12 months: the first six months, interest is not charged, after which the rate rises to 4% per annum. According to the Ministry, to date banks approved 27 loans and issued 15 thousand loans worth 36 billion rubles. Thus, supported by about 500 thousand jobs in the affected industries.

“Implementation of the program largely depends on the activity of banks-counterparties of the business. Given the fact that the state is the guarantor of these loans, the activity of issuance of these loans will increase,” — said in a conversation with RT the economist “BCS Premier” Anton Pokatovich.

According to the statement of Maxim Reshetnikov, also for the last two weeks, banks issued 20 credits on average, 1 billion backbone enterprises from the fields of engineering, medical and light industry and building materials. However, Vladimir Putin noted that “20 credits is not enough.” Reshetnikov said that in considering the banks is another 300 credits. The average rate on each loan is 3.8% per annum.

Tax concession

Previously, the government also decided to fully write off the Russian business tax payments for the second quarter of 2020, excluding VAT. As stated during the meeting with the President the head of the Federal tax service (FNS) Daniel Egorov, the Agency has prepared an information system to run the program. According to him, we are talking about the exemption from taxes of 1.9 million business entities, where 4.7 million people.

“People do themselves do not have to be, they, as usual, will take the Declaration. We automatically through the accounting system will notify that they do not have to pay tax over a certain amount for a certain period”,- explained the head of the FNS.

According to the agreement on behalf of the President to provide direct payments to affected businesses for 12 130 rubles per employee. In total, under the subsidy gets more than 1.3 million companies, which employs more than 4 million people.

In addition, in the framework of the decree of the President of the self-employed citizens in full return the tax on income paid in 2019. At the same time they will be given tax capital in the amount of one minimum wage for the repayment of tax payments in 2020. Assessment the tax benefit will affect about 670 thousand people.

“Support for the self-employed will probably allow you to avoid critical loss “whitewashing” of workers, which in a pilot mode have started to pay taxes on their activities. Also, these steps taken by the state to meet the self-employed can serve as an impetus to continue the release of “from the shadows” this segment”, — said Anton Pokatovich.