Putin Reports Preliminary 2024 Economic Results and General 2025 Outlook

A short read since the overall discussion after his remarks is omitted from transcript.

IMO, the sanctions continue to be a massive blessing in disguise for Russia and most of the world—for all the difficulties they’ve caused, economic performances are better for most of the Global Majority, although Europe and the Outlaw US Empire have suffered blowback and are politically handcuffed. How many more EU misleaders will be replaced in 2025? Meanwhile, Putin reports much of what we already know, although that knowledge was unofficial. The National Welfare Fund’s figures are key:

President of Russia Vladimir Putin: Colleagues, Good afternoon!

We are holding the first meeting on economic issues this year. Today, I propose summing up the preliminary results of the past 2024 in terms of the state of affairs in the real sector, in the field of finance, including in the public sector.

On the whole – and we have already talked about this – last year was quite successful for the Russian Economy. Key macro indicators are positive thanks to the responsible, calculated and joint actions of the state and the business community Area. We will consider them in detail today.

But first, I would like to say a few words about the state of the federal Budget. According to estimates, its deficit last year amounted to 1.7 percent of GDP. This is an acceptable level, especially against the background of the state of affairs in the public finances of some so-called developed economies.

According to estimates, in 2024, the budget deficit in relation to GDP was: in the United States, -6.2 percent; France, -6.2 percent; Italy, -3.8 percent; Japan, -3.7 percent; and Germany, –2.2 percent.

I would like to add that this indicator, our indicator, is in line with the projections laid down when forming Russia's budget for the upcoming three-year period – from 2025 to 2027.

Last year, budget revenues not related to the sale of oil and gas increased: they added 26 percent and amounted to 25.6 trillion rubles. This is almost 800 billion rubles more than the Government had anticipated. This means that a reliable revenue base is being formed for the state treasury this year, which is much less dependent on the external situation in the commodity markets.

In turn, additional oil and gas budget revenues amounted to 1.3 trillion rubles last year. This will make it possible to maintain the volume of the National Welfare Fund, even though part of its funds was directed to government spending, to large-scale, systemically important investment projects. In this way, we are preserving the potential and opportunities of the NWF as an important stabilising mechanism and at the same time a development tool.

I repeat: it is important to continue to ensure stability, the sustainability of state finance. In this regard, I would like to remind you that the budget for the next three years was formed taking into account the return to the budget rule. [TASS has developed an excellent explainer as to how Russia’s budget is devised; unfortunately, it’s in Russian but it’s here for those with translation software and the curiosity. A much more specific, technical and more difficult to understand paper about Russia’s budget rule is here.]

The priorities of the federal budget were discussed in detail in December, at a meeting of the Council for Strategic Development and National Projects, at the same time, the main tasks for the current year, 2025, were outlined.

These include the transition to a balanced growth model and the development of a supply-side economy, the strengthening of Russia's technological sovereignty and increasing the global competitiveness of domestic goods, services and technologies, the development of its own payment, insurance and logistics infrastructure and, of course, overcoming negative demographic trends, and increasing the birth rate.

I repeat: all socioeconomic policy measures, national projects and state programmes, all our budget mechanisms must work to solve these problems.

Traditionally, among the priorities of the budget are ensuring social justice, improving the well-being of citizens with low incomes.

Thus, social payments and benefits this year will be indexed to actual inflation. And at the end of last year, it exceeded the targets and expectations of the Central Bank - amounted to 9.5 percent.

I would like to note that inflation was even higher than the Government's forecast. Of course, we need to respond to this situation. In this regard, what would I like to say separately?

It was planned that from January of this year, insurance pensions would be increased by 7.3 percent, that is, by the level of inflation that was forecasted. And, as I have already said, as we all know very well, in reality it turned out to be higher. Therefore, I propose that in January we index insurance pensions based on the real situation, namely, by the actual inflation of the previous year, that is, by 9.5 percent.

I understand that the first month of the year is almost over. Therefore, I ask you to implement this decision, as they say, retroactively: recalculate insurance pensions, taking into account the increase by 9.5 percent, already from January 1, 2025 and make the corresponding additional payment in February.

And one more thing: since October 1 last year, the so-called military pensions have been indexed - for length of service, disability and loss of Breadwinner. The increase was 5.1 percent.

I think it is right and fair for the military pensioners to also make additional indexation, taking into account the actual price increases last year, and also retroactively - from January 1, 2025.

Please The Government will take the necessary actions as soon as possible to implement these and other decisions on the indexation of social payments and benefits.

Colleagues, I have already said that it is necessary to achieve moderate inflation and generally avoid imbalances in the economy and in the consumer market. It is important to closely monitor the state of demand, its sectoral structure, as well as the volume of lending.

In December, the dynamics of the corporate loan portfolio slowed down significantly, and in January it is below the targets. Although, the quality of loans issued remains at a high level. The share of overdue debt in the corporate portfolio, that is, loans to companies, businesses, is 2.6 percent, and in retail – to individuals, 3.7 percent. And these indicators have been stable throughout the past Year.

In turn, the Russian banking sector has a sufficient capital reserve, it has grown over the previous year, the banking sector feels confident, and has the necessary resources to finance the development of the domestic economy.

It is clear that a decrease in lending activity can create risks for long-term growth. We discussed this not so long ago at a meeting with business. It is important to prevent such distortions and, in general, to ensure such an increase in the loan portfolio, which is necessary for confident economic dynamics and at the same time allows us to achieve the Central Bank's inflation targets. This is not an easy task, but we must strive for it.

I would like to draw your attention to the fact that it is necessary to work substantively with each industry, because the overall picture may show a normal growth in aggregate demand in the economy, that is, the volume of loans issued is substantial, but the situation may differ in individual sectors.

In this regard, I would like to remind you that at the end of last year, at the meeting with the business community that I have just mentioned, we agreed to resume the work of the Government Commission on Improving the Sustainability of the Development of the Russian Federation Economy. It was active during the coronavirus epidemic – then the Government created this mechanism, it worked well – including preparing and making timely decisions to support enterprises, businesses, Industries. This experience, of course, should be taken into account when building sectoral and economic policy as a whole, especially since the Government now has and new digital planning and forecasting tools.

Today I expect to hear our colleagues' proposals on ensuring the sustainable development of such industries as the coal industry – we also talked about this not so long ago – the construction industry, the production of building materials and trucks, as well as public Transport.

I would also like to remind you of the instruction issued following the recent meeting of the Council for National Projects. Namely, I expect our colleagues from the Government to prepare an action programme in the first quarter of this year on a large-scale agenda for structural development and increasing the potential of the Russian economy, including business support measures that should have the maximum effect to increase the output of goods and services.

Come on Start. Please, give the floor to [Minister of Economic Development] Maxim Reshetnikov. [My Emphasis]

Ideally, the budget rule aims to reduce any budget deficit incurred over the next several budgets. As you read with inflation increasing beyond the forecast, additional funds will be allocated that thus go beyond what was budgeted forcing the budget rule to be bent. Another note on genuine budget deficits: Western Neoliberalism count's rents and other non-productive earnings as positive productive earnings and includes them as a positive to GDP when they’re actually negatives that subtract from GDP. Russia is fortunate relative to the West that it has negligible amounts of such earnings, which when properly recalculated causes Western budget deficits to vastly increase 2-3X as large as those stated.

Desperate attempts by Team Biden at the end of its life to try and curtail the continued growth and functionality of Russia’s National Welfare Fund via more illegal sanctions on its hydrocarbon exports will fail as have all those that came before. More pipelines are being constructed within Eurasia while more are being proposed, all of which are sanction-proof. Putin wants to attain a supply-side economy so inflation levels will decrease because more products will be supplied than demanded thus easing demand-driven inflation. The (positive) problem is that all other Eurasian economies are expanding and thus increasing demand, which means regional inflation will likely remain higher than projected. And that will be fine as long as wages keep pace, which they have so far. The continuing efforts to isolate the Eurasian financial, banking, commerce, and economic systems from those of the West will help insulate those systems from the very negative fallout from the coming economic crash that will likely be caused by Trump’s mismanagement of the Outlaw US Empire’s economic system that’s currently very dysfunctional. It’s very curious to note that Russia’s financial rebound began with the Great Bankster Fraud of 2007-8.

The Five Billion people strong Eurasian market is approximately five times that of the Euro-Atlantic and can easily sustain the continent’s growth without the latter component. That’s the huge geoeconomic and thus geopolitical conundrum facing Trump and his EU vassals. Russia’s in a sweet spot the West can do little to undermine.

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