6 Annual Big Press Conference Part 2
February 1,2007
President of Russia V.Putin
Round Hall,the Kremlin,Moscow
This is an approximate figure because the debt was calculated in different currencies. We have paid practically all our debts ahead of schedule, and at the same time we have seen the countrys gold and foreign currency reserves increase from $12 billion to $303.7 billion today, giving Russia the third-biggest foreign currency reserves in the world. Add to this the $88 billion in the Stabilisation Fund, and it is clear that these funds will contribute to the Russian economys stability and provide it with solid reserves to fall back on in the event of a serious drop in oil, gas and energy prices in general on world markets, although, given the world economic growth forecasts, this looks unlikely to happen. On the contrary, it is more likely that there will be insufficient energy resources to go round.
Major Russian companies increased their value by more than 90 percent. Market capitalisation also continued to show rapid growth and last year grew at a rate of more than 80 percent. Without any doubt, 2006 can be called the year of IPOs, because it was the first time that Russian companies carried out initial public offers of their shares on such a scale IPOs worth dozens of billions of dollars - on international and Russian exchanges. Russias stock market capitalisation is approaching one trillion dollars, and in terms of this indicator Russia has now become one of the worlds ten-largest economies. And this is just the beginning.
These are all important economic development indicators, but this is not what is most important. What then was the big difference in the quality of Russias economic growth in 2006? What is most important of all is that this growth was based not only on favourable external economic circumstances for our country, but also to a considerable extent on domestic factors, on consumer and investment demand within Russia. This is the result of conscious, purpose-driven policy decisions by the Russian Government and the Central Bank.
Tax incentives and changes to customs policy create incentives for entire sectors of the economy to upgrade and modernise. I am pleased to see that fixed-capital investment reached the record level of 13.2 percent in 2006, and retail turnover grew by 13 percent. As for the construction sector, it broke all the records. Over past years it has shown decent and steady growth of 7.6 percent a year, but last year it more than doubled and reached a figure of 15.7 percent.
These results are good to see, but we must also remember that in terms of new housing coming onto the market, we are still at only 82 percent of the 1990 level, and so there is still progress to make. If the sector keeps developing at this pace, however, we will not only catch up to the 1990 level soon, but will completely overtake it.
A couple of words now on currency market liberalisation. These were not easy decisions for us. To speak frankly, we were somewhat nervous, myself included, about giving the go ahead to the policy proposed by the Central Bank. But I am pleased to see that this policy has proved its worth. The Central Bank has sent the market clear signals and the market has listened. Of course, the Central Bank did take a fairly conservative line and preserved regulation instruments in this sector of the economy. If you recall, however, I said in my Address to the Federal Assembly at the beginning of 2006, that it would be good to speed up the transition to a fully convertible rouble and introduce the new rules not as from January 1, 2007, as was planned, but starting in the summer of 2006. We went ahead with this decision and the results lived up to all our expectations. Previously, we were seeing an outflow of capital from Russia of from $15 billion to $25 billion a year, but last year there was an unprecedented inflow of private capital totalling $41 billion into Russia. Of this total, $31 billion comes from direct foreign investment. Overall, the results of our decisions confirmed what we already knew, namely that money does not go to countries that close their markets, because it is afraid that it will not be free to leave again, but it goes happily and without fear to countries that follow a liberal policy, as we are now observing here in Russia.
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9:497 Ежегодная большая пресс-конференция Part 20 В...by niknikolay4,676 views
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