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Medvedev: Russia Adapting to New Economic Reality

  • Reuters

Russian Prime Minister Dmitry Medvedev, foreground, delivers his annual report to lawmakers in the State Duma (lower parliament chamber) in Moscow, Russia, April 21, 2015.

Russian Prime Minister Dmitry Medvedev, foreground, delivers his annual report to lawmakers in the State Duma (lower parliament chamber) in Moscow, Russia, April 21, 2015.

Prime Minister Dmitry Medvedev said on Tuesday Russia was suffering significant economic problems because of international sanctions, but the situation could have been much worse and Russia was adapting.

Referring to Western sanctions imposed last year because of Russia's actions in Ukraine, Medvedev told parliament: “Losses from the restrictions which were introduced are significant.”

“According to estimates of some foreign experts, Russia has suffered losses of 25 billion euros ($26.7 billion) in total, which is 1.5 percent of gross domestic product, and in 2015 it could increase several times,” he said in an annual speech to parliament about the government's record.

Medvedev said Russia's economy had contracted by around 2 percent in the first quarter, but that the economic situation could have been far worse and was stabilizing.

On Crimea

He linked the sanctions to Russia's takeover of the Ukrainian province of Crimea a year ago, but said the “historic” step had been justified.

“For many the return of Crimea was the restoration of historic justice, which in its significance is equivalent to the fall of the Berlin Wall, the reunification of Germany or the return to China of Hong Kong and Macao,” he said.

Although the economic situation was stabilizing, he added, “there should not be any illusions” about the difficulties, which had been made worse by the collapse in international oil prices and “by several domestic problems that we weren't able to solve.”

However, Russia had seen worse in the past and could cope, Medvedev said.

“If external pressure intensifies, and oil prices remain at an extremely low level for a long time, we will have to develop in a new economic reality,” he said.

“I am convinced that we will be able to live even in such a reality. The experience of the recent period has shown that we have learnt how to do this.”

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