three stooges free. and free blog video for your media project free media gogarty dot com. welcome back this is the headlong. rush demand investigation into reports of civilian deaths from the nation's campaign and leave that bush launched almost as a thousand strikes and seven months by locals say that the rebels are still crazy atrocities including summary execution again supporters of the toppled gadhafi regime. the broncos witnessing this president's power elite holding the american military as was told from day one told country a new way of sectarian violence now threatens its political leaders campaign simply so violently. under step up

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hello again the welcome. to new show. and today the program. has been particularly challenging for the world because christine lagarde the managing director says the financial crisis. pushing it to the great. relatively speaking has fared pretty well delivering. a balanced budget but still the risks ahead are real and russia remains vulnerable to external shocks like for example fall over and as you

propose so how will the country get two thousand and twelve. the first deputy chairman. despite global economic instability in russia in two thousand and eleven official say the end you inflation is at historic a seven percent while g.d.p. almost five percent consumer loan rates have dropped significantly reaching the pre-crisis levels and deficit rates have risen the central bank also has the world's third largest foreign currency reserve economists say a russian economy is healthier than most european countries russia's recent accession to the w cheadle is likely to boost the economy further clearing the way for foreign investment. well first of all what would you cite as the russia's biggest single friend and she

would she have been in two thousand and eleven the biggest achievement is was still alive i mean the financial system is broken i would say but a good and the. banks are good shape in balances in the capital position no closer to the end of the. we can see some kind of shortages on the declivity market but that could be issues of pain for the banks in the world it's not there are very much in phenomenon bloss the lending of banks is going up quite rapidly and even we became a little bit nervous about that this year will have around twenty five percent of increase of lending of the banks nominal terms i mean so we would rather have some can close it to twenty percent but that support anywhere that support economic

growth well according to the world economic forum ranking russia holds the thirty ninth place in the financial development last year the position was forty so we're we're one point up is it something we could be proud of or considers well and if we will live long given higher one place one year. etc listed i would say this is very listless to make sure we still have a lot of problem to be solved i mean the fragility of the system dependence of oil and generally commodity prices some problem in banking regulation for instance the fiscal position. i mean non oil and a budget deficit is big the primary that's not. the primary deficit this year but

not all guys deficit is still big so this is all the problems will have to solve if we really have to be high in the struggle to be moving to the well it's a fact that now. that was switzerland ok vladimir putin recently talked to the nation and he said i quote that inflation in russia was expected at slightly over six percent this year a record low level comparable with european levels what contributed to this itchy feet from you. first the monetary situation before in say two fall isn't ten and. the. supply of money was very big more than thirty percent a year it was the big pressure on the market this year fortunately it will have only twenty one percent of my money additional money supply this is number one the

second point is the much better food prices situation in both global demand and domestic dimension because in previous year it was very high pressure of the food prices on the index of headline inflation that is a number number two position and probably the what one is. a new exchange rate policy i mean now it's much more flexible so it's not not very much dependent on the capital inflows and outflows and the pressure on the committee to cite also i mean the combination of these four factors helped us a lot control inflation how good are the chances to keep this low level of inflation. next year maybe make it even lower we will have the plans.

to have it less than six percent next to. the corridor as of five point five to six that is not so easy but that is a realistic. i mean. are we. as far as we're can predict the mantra situation it will most acceptable for for for at least the first half of the year probably all the twelve months of the year the. and the point we are not very much sure of is of course is the food food food prices it would very much dependent of the harvest and other i would say technical or thinks in russia in other countries but we can see it only closer to the middle of the year and also the w t o membership may influence food prices yes of course but not so high because we still have some

period of time to adapt ourselves to the full membership of the of the two. the russian economy i quote will grow food point two to four point five percent in two thousand and eleven putin said during the q. and a session with the nation this is not bad as a result of the year compared to other developed economies but if we take the brics country this is the lowest result among the brics among the emerging among the fund's global economies worsened so that means that only russia is the main street you know we're just in the middle of them just in the middle of course the only not exactly brics. we're not exactly breaks and we're not exactly developed yet of course was something in the middle of that and very much dependence of our institutions are now economists closer make in which direction you know we will really follow in our future but anyway of course let's compare with the say america

and europe one one point half marks and two percent of growth but from the other side we'll have india and china of say nine. percentage but they are they also have high very high inflation in here this year we'll have much higher inflation then russian federation and china not so high but close to it then why do we call or so of bricks because russia prefers to be the best kid in town the last kid in the city is that it's not a cow or the name of this is one of the guys from goldman sachs. his is his label so it doesn't really necessary to use the labels you have to understand better the real sense of the problems on the situation so i would say that we have not very high but sustainable growth this year more than four percent the next c.e.o.

bill it will be close to four probably little bit lower but around that so in a way it's about speaking about rating agencies we just got the news that that fitch has downgraded six biggest banks in the united states and europe bank of america goldman sachs b m p some of the well according to analysts these banks the down there reading of these banks is going to influence the world financial situation will it influence that the banking situation in russia usefully depends the they are all over the earth and agencies are quite contrary. controversial contradiction would say let's take this example then they done great the sovereign trait of can i think states it was absolutely zero influence to the markets zero influence so i believe that the little excess and

investment bankers they prufrock to make their own analysis or to attract some independent then a little raised who pays the rating agencies. so you know they've used. but of course of course this is ration of banks first in the eurozone but also in the united states that bonds have in their balance sheets they have to leverage the european both sovereign and couple that and of course that was a point of of dangerous point of notice but and of course it somehow influenced russian banks because as soon as the global markets the rate of stock exchange the rate of financial institutions first of all but it's going down it influenced sosh and we can see that our biggest banks which are on the market like this about one call that have been loosened their position keep keep it inside this

situation. and the kind of high profits they see here the it was fantastic result for say these bob on call will get more than ten billion years dollars as a net profit the if it's a bill half mil and food and stuff probably because this is net profit and in that very situation that capital stock is going to just because of influence of the global financial situation says will you cry first deputy chairman of russia's central that spotlight will be back shortly after the break so stay with us we'll continue this into the.

to. go in to. feel.

feel. welcome back to spotlight i'm all good loving just a reminder that my guest on the show today is lucaya and he's the first deputy chairman of the russian central bank and we're discussing the financial results of

two thousand and eleven and maybe what it's awaiting in two thousand and twelve mr kaif. have i.m.f. and. i would say mr perry bret he was interviewed by spotlight couple weeks ago and he said that russia has the potential to grow six percent per year he said that sitting in your chair would you agree with this assessment from the i.m.f. or. honestly i'm not so optimistic about the potential i believe in you know. future and global prospect is not so high and russian prosperous and not so high because well very much dependent on the global demand demand for commodities demand for i export and the demand remains dependence of the rate of growth in the parts of the world i very much believe that

the general rate of growth will go on down i mean in developed countries will be something around one point half to two percent and even in emerging markets where it will go down hopefully not so fast all is speaking about being pessimistic ex finance minister couldn't is a specimen stick as you are and he said a few days ago that the new wave of economic recession has already started and it's here in russia to do you share this point of view you know that expression that pessimist is a well informed of the i'm just going to say you are good in that i'm currently i am i hope the new comes to russia at least. the difference between mr good and miss terminology because i do not like words like crisis or wave of crisis i believe that this is a new reality new market economics reality this is for

a very long period of time and we cannot just easy come back to the good old times you say gold is ninety's always euro suzi because. you know when the century when the global growth of was in average around five four five percent i thought no or nothing of the good old with the seventy's that. all this but god. and that is the popular there it's not that it's not not the you know damage or something we'll have to understand that that isn't your normal it's in your reality and to conform and to prepare ourselves to that so it means that girls don't want to see not so hard and this driver of russian economic growth will not work very fast of course there are other drivers it means consumer demand of the population and decide to go up most of all because of the

growth of retail lending i said before that. general and in. will increase by twenty four twenty five percent but the detail to the consumers more than thirty percent and this is a driver for consumption in domestic consumption but there is a competition between the domestic production and import goods the here and the input is going up really fast and then fought driver is investment growth but for that purpose will have to you know create better and more friendly business environment to the investors well let's hear more from the russian prime minister here's what wedeman put in had to say the other day about the state of russian economy. our economy is expected to grow to rate of four point two four point

five percent compared to one percent in europe many leading european economies in the united states will see no growth next year some european countries are going into recession there are usual figures their economies are going to be in the minus . it's not something we're excited about as it may affect us as well nonetheless our fundamentals are better and more stable there is another important index russia is third in the world by the size it was a golden foreign currency reserves which we have restored almost to the pre-crisis level we also have a ten percent foreign debt that's minimal for countries with developed economies. well now i have another quote from the i.m.f. and it's not so optimistic than what mr perec had to say this. they say that rocher if the crisis hits really russia will have fewer resources on the budget side to respond then in two thousand and eight when we had this stabilization fund do we

have enough reserves to respond to the crisis is today the things of course we'll have much less resource knowledge then in two thousand years ago or so this is correct as all other countries because what was. the most important result of that was the fiscal position will have great fiscal sockless around seven percent so we can spend the money just to support internal demand now the two previous years were for a deficit this year will have fortune to her suppose something between zero point five and one percent of g.d.p. is this up listen what it is not seven and we cannot just easily you know spend money to support demand in the country so that is the main position i.m.f. . minutes from the other hand there is also the subtle but are pushed into the same

very close to that we had before so i mean we can. we can support in turn or land in our finance operation to supply liquidity to the banks and to have. to adapt themselves to the new reality and to continue a land to the fire no bourse as far as i remember starting from the beginning of two thousand and eleven all russian politicians to the highest level were talking about investment in attracting investment to russia and you've mentioned that through today but all this year we witnessed great capital outflow from british according to your analysis a year ago i mean central bank you said your forecast was thirty six billion dollars the the. capital outflow but actually it reached up to seventy four billion dollars is that true and what's the reason that is absolutely true

about let's let's divide the problem into pieces that is that figure that is net private capital outflow that is difference of the inflow gross in full and gross outflow. you can have that situation then really for instance for in direct investments goes to the country but some don't muster capital is sick in the best person who is outside and in that case you have this negative result and it could be some other different reasons for it so mostly that amount of money this is money market that is money we're not talking a bird money running away from russia. or we are also going to cut what what kind of money once again there is that and then now now you will have to have a long line it should money is money in the money market so that is in money instrument and deported in some boards in accounts in the banks and so on so for

now then the situation in europe in terms of liquidity is very acute it means that our banks and companies cannot refinance their. that in there for in that and that had to wait just in accordance with a digital scale for instance it means that in the two to last month they have to pay around twenty billion dollars or something like that and that is the reason they have talked humiliate money here and fight back to the creditors outside of the country but the really important point is direct foreign investment and that is materialized money money invested in the real assets in industries in different kinds of businesses and of course that amount of money cannot be you know easily go in and out this is more conservative invest more long

term invest and we would rather attack this kind of a must but anyway this m r e seventy four billion means that the central belt is a monetary authorities stopped and that it or rubles before would just buy the cards and we you know supply the economy with the rubles by that direction now beginning from september we do not buy. we even sell something from our results to the market and it mr allies are all bulls from form the market in the russia that is the problem not the seventy four is a figure but this situation in the west money market and some banks. the problems with liquidity and we'll have to. do propose some specific measures to help them. as far as understand the russian government is not planning to raise taxes to to

compensate for the losses in budget revenues what about the central bank are you in favor because well we have the lowest taxes in europe the lowest income tax at least it is the central bank in favor of raising taxes no no no we're not. in taxes of course but you see you have somehow balance your budget you have free options number one you know to cut your spending number two to increase your avenues and number three to borrow. i believe the first position is but it is best so if you're in a position to rationalize somehow you're spending to have better structure for expenditures and to cut the some extra expenditures you have and that's the reason for you not to race anything from the market and not guys your taxes thank you thank you very much the only problem is that it's election year and that

governments don't like to tell tales to cut expenses shoes that will actually stay on the porch and thank goodness was alex able to cry a tarp on father's life and he's the first deputy chairman of the russian central bank that's it but after all if you want to have your say on fog lights or have someone in mind to your plane crashed in phoenix trying to drop me a line we'll be back with more personal comments on what's going on in an outfit russia and so then they are to you and me to. kid this is. the mother. blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah.

wealthy british style. one.