Industry overview Vladimir Putin noted the growing optimism and positive attitude of domestic business 14.04.2023

At a meeting with the Cabinet held this week, Vladimir Putin noted the strengthening of positive trends in the Russian economy.

The retail turnover has increased significantly, the volume of domestic and export rail freight transportation is increasing. The President noted the high level of business activity. According to the Head of state, it has reached 56.8 points, which is the third value in history and directly testifies to the growing optimism and positive attitude of domestic business.

The President gave a restrained positive assessment of the dynamics of filling the consolidated budget. During the first quarter, its revenues exceeded 13 trillion rubles. Consolidated budget revenues from the oil and gas sector decreased by 1.3 trillion rubles due to low prices in the global energy market last year. The missing sums were replenished by other industries and the agricultural sector, which revenues increased by 1.4 trillion rubles. This should also be considered as a positive indicator of the country's macroeconomic development.


In the second quarter, amid rising global energy prices, the consolidated budget revenues from the oil and gas sector are expected to recover.

Vladimir Putin devoted a significant part of his speech at the meeting to inflation issues. By the beginning of April, its level had dropped to 3.3 percent year-on-year. Its further slowdown is predicted.


Elvira Nabiullina, who spoke the day after the meeting, confirmed the scenario of a lower inflation. But at the same time, the head of the Central Bank explained its slowdown by low price growth in the summer and autumn of last year. According to Elvira Nabiullina, the current increase in the cost of goods and services is also moderate, but still ahead of the price dynamics of the final six to seven months of last year. Though, she did not rule out a certain reduction in the Central Bank's refinancing rate against the background of slower inflation.


The Head of state, as well as the head of the Bank of Russia, are far from exceptionally rosy assessments of the state of the domestic economy. Vladimir Putin, moving from stating indicators reflecting the revival of business life in the country to setting tasks for the Cabinet, once again warned against complacency. He stressed that external risk factors for our economy have not gone away.


Then the Head of state outlined a number of branches of the Russian economic complex that have failed to overcome the crisis consequences and need additional support measures.


According to the president, in the "problem zone", there are the automotive industry and the timber processing complex, the manufacturing of chemical products and fertilizers.

The head of state is also concerned about the prospects for housing construction, which last year demonstrated record volumes of apartment commissioning, and now the real estate market, according to some experts, is showing signs of overstocking. As claimed by Vladimir Putin, it may lead to a reduction in construction in the future.


The Head of state considers it to be necessary to support the demand for housing. In the coming days we will have to find out the measures the Government will propose.

A significant part of real estate market experts believe that the further deployment of preferential mortgages, most likely, will not be able to maintain demand for housing. In their opinion, preferential credit programs give a revival only in the short term, and then lead to an increase in the value of real estate and neutralize the profitability of preferential mortgages.

The Bank of Russia's position also serves as proof of the validity of this point of view. Starting from May 30 of this year, it intends to discourage the issuance of mortgage loans, the full value of which is significantly lower than the market level. Such programs, according to the Bank of Russia, overestimate the cost of purchased apartments by 20-30 percent.

The Kamchatka Territory may also serve as proof of the limited effectiveness of preferential mortgage programs. With a limited supply of new housing and a significant increase in the construction index, these programs could become an additional factor in the set of causes that led the real estate market in the Avacha agglomeration to soar prices to the Moscow level. The paradoxical situation with the growth of the "weight" of square meters in new buildings as well as on the secondary housing is also strengthened by population decrease on the peninsula.


There are certain hopes that the cost of housing in the Avacha agglomeration will begin to decline with the start of mass housing construction programs. Currently, the construction of the microdistrict Chyrelchik in the Paratunka resort area is already underway. It is planned to commission about 47 thousand square meters here, excluding individual housing construction.


This year, the implementation of the Far Eastern Quarter program is expected to begin in Petropavlovsk-Kamchatsky. It provides for the construction of 120 thousand square meters of modern housing in the regional capital.

Proposals are being formed for investors on complex construction on the site of the former antenna field on the outskirts of Yelizovo.


To this list should be added plans for the renovation of the historical center of Petropavlovsk-Kamchatsky, which also provides for housing construction. In general, according to Vladimir Putin's statement made in March during his visit to Ulan-Ude, 150 billion rubles will be allocated until 2030 for the implementation of the master plan for the development of the regional capital. The construction of the first facilities will begin next year.