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The goal of 3% annual economic growth in Russia cannot be achieved without raising the incomes of its citizens, which is why their support has been and remains a priority of government policy. This was stated on Friday, January 15, by Russian Minister of Economic Development Maxim Reshetnikov at the session of the Gaidar Forum "Hard talk about economic growth".
"Without an increase in personal income, without an increase in household consumption, further growth of the economy and reaching the 3% growth, which is our goal, is impossible," the minister stressed.
In this regard, he reminded that throughout the last year, personal income support was the government's priority, both in the form of direct social payments to non-working citizens who had temporarily lost their jobs or to families with children, and in the form of support to businesses. "Ultimately, the aim of business support was also to support employment," said Maxim Reshetnikov, reminding that the relevant programmes are still in operation. "We now have 5.4 million jobs protected under the FOT (salary fund) 2.0 programme (concessional loans with write-offs), which entrepreneurs are retaining. We see high compliance with the covenants under this programme," he added.
At the same time, the very structure of consumer spending and preferences can also have a significant impact on economic growth, the head of the MED continued. "And here we see that there are significant changes taking place. There are short-term changes due to the lockdown, but at the same time there are also long-term effects that we have to pay attention to. In particular, changes in trade preferences: whether people return to shopping centers and offline retailing in the same volume as before, whether they return to cinemas, what model will this sector follow, whether the demand for international tourism return and what part of demand can be replaced by domestic tourism (and it is already obvious that it will be a considerable part); what part of employees will remain in remote work," he listed. "To a large extent, changing these preferences will cause changes in the structure of businesses and, ultimately, in the demand for investment as well," the minister pointed out.
He also noticed that "well-being" no longer includes personal income only, but also housing conditions, comfortable cities, quality of healthcare, elimination of the digital inequality and access to all services, opportunities for personal fulfilment, and so on. "This is also a global trend. There are the UN Sustainable Development Goals, there is the OECD's "Better Life Index" methodology. Essentially, the new National Development Goals, which the President announced in July, summarise all this best practice and make the concept of economic growth and welfare growth broad and comprehensive," confirmed Maxim Reshetnikov.
"We understand clearly that the vast majority of economic growth is driven by personal income growth," he concluded.