In 2020, the inflation rate in Russia will not exceed 4%. On Tuesday, May 19, said the head of the Ministry of Economic Development Maxim Reshetnikov.
“The situation in the price market at the moment and in the consumer market is really stable. The devaluation effect that was, it has by and large been exhausted to date. This may not always be a good factor, but the fact that demand was squeezed as a result of quarantine measures certainly had a bright anti-inflation effect, ”the minister said at a meeting of Vladimir Putin with members of the government.
Reshetnikov also said that “the economy is starting to recover” as quarantine restrictions are lifted. Thus, in a number of industries, enterprises have already resumed their work, and recently the indicator of economic activity in the country has risen from 67% to 71–72% of the pre-crisis level.
“If we talk about economic recovery, the figures of recent days show that the dynamics has gone up. Our restrictions are lifted, we see this according to the decisions made in industry, in construction and in agriculture. In the basic industries, all restrictions have been lifted - and we immediately saw this both in the increase in electricity consumption and in the increase in transportation by all means of transport, ”the minister added.
In general, according to him, the level of "drawdown" of the economy may be less than previously expected. Nevertheless, it will take time to fully restore activity, the head of the Ministry of Economic Development pointed out.
On May 20, the agency is due to submit an updated macroeconomic forecast, and on May 25, a nationwide economic recovery plan.
Help to Russians
We will remind, earlier the authorities announced new measures to combat the consequences of coronavirus and support business and the public. So, Vladimir Putin ordered from June 1 to introduce one-time payments of 10 thousand rubles for each child from 3 to 15 years old inclusive. As the president said during a meeting on Tuesday, the proposed measure was "extremely in demand." As of May 18, about 12 million applications were received from parents.
“It is estimated that the total number of children on whom families will receive payment will be about 22 million, and together with adult family members this measure of support will affect, if we take the coefficient of 1.8, more than 50 million people in the country. And the amount of additional budgetary funds for these purposes is very substantial. Even in today's difficult conditions, we have found an opportunity to allocate 197.2 billion rubles, ”Putin said.
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The head of state also recalled that a monthly payment of 5 thousand rubles for children under three years old was extended to families in which the first child was born from April 1, 2017 to December 31, 2019. According to estimates by the Ministry of Labor, in total, the measure should support about 5 million children.
“Payments will help Russians survive the difficult times associated with the spread of the pandemic and forced quarantine measures. At the moment, it is planned to allocate 6.8% of GDP for direct support of citizens, which indicates the willingness of the authorities to spend money from the reserve to smooth out the negative consequences of COVID-19. Payments will become especially relevant especially for families with children, where the income of parents has declined significantly in recent years, ”said Alexei Korenev, an analyst with Finam Group.
Credit issue
As part of the business support and employment rate, starting June 1, Russia will launch a program of concessional lending to enterprises from the most affected sectors at a 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. A 85% loan to companies will be secured by state guarantees. Moreover, the loan itself can be partially or completely written off if employers retain jobs.
“The potential coverage of companies with 7 million people employed by this program, and we expect that at least half of these companies will take advantage of this measure,” said Maxim Reshetnikov.
Additional assistance to business is provided by the loan subsidy program. Thus, banks already provide companies with loans for a period of 12 months: for the first six months, interest is not charged, after which the rate rises to 4% per annum. According to the Ministry of Economic Development, today banks approved 27 thousand loans, and issued 15 thousand loans worth 36 billion rubles. Thus, about 500 thousand jobs in the affected sectors were supported.
“The implementation of the program largely depends on the activity of business counterparty banks. Taking into account the fact that the state acts as the guarantor of these loans, the activity of issuing these loans will increase, ”explained Anton Pokatovich, BCS Premier economist in a conversation with RT.
According to a statement by Maxim Reshetnikov, over the past two weeks, banks have also issued 20 loans of an average of 1 billion rubles each to system-forming enterprises from the field of mechanical engineering, medical and light industries, as well as building materials. Nevertheless, Vladimir Putin noted that “20 loans is not enough.” Reshetnikov said that banks are still considering 300 loans. Moreover, the average rate on each loan is 3.8% per annum.
Tax rebate
Earlier, the authorities also decided to completely write off tax payments to Russian business for the second quarter of 2020, excluding VAT. As the head of the Federal Tax Service (FTS) Daniil Yegorov said during a meeting with the president, the department has already prepared an information system for the program. According to him, we are talking about the exemption from taxes of 1.9 million business entities, where 4.7 million people work.
“People will not have to do anything on their own; they, as usual, will hand over declarations. We will automatically notify them through the accounting system that they should not pay tax for such and such an amount for such and such a period, ”the head of the Federal Tax Service explained.
Egorov recalled the president’s order to provide direct payments to the affected enterprises at 12,130 rubles per employee. In total, more than 1.3 million companies that employ more than 4 million people fall under the subsidy.
In addition, under the presidential decree, self-employed citizens will be fully refunded the income tax paid in 2019. At the same time, they will be provided with tax capital in the amount of one minimum wage to pay tax payments in 2020. According to the Federal Tax Service, the payment will affect about 670 thousand people.
“Support for the self-employed is likely to avoid the critical losses of“ whitewashed ”workers who began to pay taxes on their activities in a pilot mode. Also, these steps of the state to meet the self-employed can serve as an impetus for continuing to emerge “from the shadow” of this segment, ”said Anton Pokatovich.