Russia Achieves Financial Sovereignty, Eyes Stronger Ruble: Siluanov, Reshetnikov

ST. PETERSBURG, June 4. /TASS/. Russia has achieved absolute sovereignty in financial matters and is independent from decisions made by third countries, Russian Finance Minister Anton Siluanov said at the St. Petersburg International Economic Forum (SPIEF).

At the same time, Russian Economic Development Minister Maxim Reshetnikov said higher interest rates and a stronger ruble could become defining features of the next economic model.

According to Deputy Chief of Staff of the Russian Presidential Administration Maxim Oreshkin, there is no point in waiting for sanctions to be lifted or for the return of the world that existed 20 years ago, as it no longer exists.

TASS has compiled the key statements made at SPIEF.

Siluanov’s statements

Russia has achieved absolute sovereignty in financial matters: "From the financial standpoint, I think we are absolutely sovereign -- not just ‘I think,’ we have achieved a completely sovereign position. Namely, we are independent from decisions made by third countries."

Russia makes decisions on budgetary matters entirely independently, based on the country’s priorities and needs. "But I want to say that under no circumstances should we relax here. Sovereignty must be protected very carefully."

Russia does not depend on external financial infrastructure and relies on its domestic financial and economic capabilities: "We do not depend on external financial infrastructure. We have created our own infrastructure, it works, and even the disconnection of all financial services did not affect our ability to conduct settlements."

Russia’s external debt currently stands at 10% and will soon be fully repaid: "Our external debt is only 10% overall, which we will soon repay, and I hope no such debts will remain."

Russia has been living for years under conditions of "global lawlessness," which makes it necessary to create conditions for domestic development.

Current market conditions make it possible to replenish the National Wealth Fund.

Russia’s resilience has been built in recent years thanks to its people, financial system, and technologies: "Resilience is not only about finances. It is our people, our capabilities, and technologies into which we have invested heavily. All of this forms the country’s overall resilience, which has developed over recent years."

Value-added tax (VAT) revenues to the Russian budget are coming in "above plan."

The Russian economy has shifted to growth, with cuts to the Central Bank’s key rate serving as the main indicator: "We see that the economy has now moved into positive territory. Incidentally, our main barometer is the key rate. The rate is going down -- the economy is growing."

The Finance Ministry is currently preparing proposals regarding tax expenditures, and such work is ongoing on a permanent basis.

Looking ahead, the Finance Ministry believes the oil price cutoff in the budget rule should be lowered: "You know, this year we decided not to change the cutoff price, but looking ahead we are now thinking it obviously needs to be adjusted downward."

Reshetnikov’s statements

Higher interest rates and a stronger ruble could become features of the next economic model: "It is obvious that the contours of the next economic model are also becoming more or less visible. This means a stronger ruble than many would like. It also means somewhat higher interest rates, because there are issues related to the budget deficit. Therefore, the Central Bank is responding to this, and we will need time to reach the fiscal policy targets we have set."

The Economic Development Ministry expects the investment situation to stabilize in the second quarter: "The figures published for first-quarter investment -- you know, minus 14.5%. We treat them very cautiously because they do not align well with GDP dynamics. GDP was down 0.2% in the first quarter. We still believe this is due to first-quarter volatility and other factors. I think in the second quarter we will see these two approaches converge. The investment situation should smooth out somewhat and improve, at least statistically."

Without new sources of labor, it will be difficult for the Russian economy to grow: "We are talking about labor markets. <…> If we look at them, we generally understand that we need to find labor resources somewhere. It will be difficult for us to grow, beyond the additional productivity efforts we are making, though additional measures are also needed there."

The Economic Development Ministry is concerned about whether banks have sufficient capital to support economic expansion, while lending growth should not be concentrated in one or two banks.

Oreshkin’s statements

BRICS countries account for 50% of global economic growth, while the G7 accounts for less than 20%: "BRICS countries now account for 50% of global economic growth, while the Group of Seven accounts for less than 20%."

Western economies are currently experiencing instability and turmoil: "The Western part of the global economy is experiencing turbulence and fever. <…> This turmoil is, of course, also significantly affecting us."

The opportunities available to the Russian economy are growing and should be used to move forward: "The share of those imposing sanctions under current conditions is shrinking, while the rest of the global economy is growing rapidly. Therefore, the opportunities available to us and our economy are becoming greater and greater. We should use them to move forward."

There is no point in waiting for sanctions to be lifted or for the return of the world that existed 20 years ago, as it no longer exists: "The world that existed here 20 years ago no longer exists and will never return. The world is different."

Russia’s economy has grown by 10% over the past three years, while growth in Europe totaled just 3%.