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Putin’s United Russia address puts economy in focus

The economy was central to Russian Prime Minister, Vladimir Putin’s, St Petersburg address to 600 delegates of United Russia, as he noted pressing issues remain.

Putin said the government had successfully contained the economic downturn, with unemployment down from its February peak. But he acknowledged that inflation remains a problem although it has been improving it, and that the economic contraction has less than expected.

“At the end of the year our GDP decline won’t be as big as we had assumed earlier. We thought it would be 10 %, but it will be lower – around 8 to 8.5%. But that’s still too much, more than some other countries. Judging the current inflation situation, in 2009 it will shrink substantially. If last year it was 13%, then this year by the end of the year, it will be around 9.6% and definitely less than 10% which is the best figure since 1992. But that’s still too much and we will continue battling inflation.”

Putin spoke about measures to boost the car industry, power generation and to improve the availability of mortgages. He said the car industry would benefit from three types of support: Subsidy, government orders, and a cash for clunkers scheme, which will pay just under $2000 dollars starting next year.

“Any Russian citizen, who uses a car 10 or more years old, will receive a check for 50 thousand Roubles and will be able to use that money to buy a new car. It doesn’t matter what car he will buy, Russian or foreign, as long as it is assembled in Russia.”