Vladimir Putin holds meeting on macroeconomics

President Vladimir Putin has held a long-promised meeting on macroeconomics in the Kremlin. It could not have possibly been postponed any longer, notes Kommersant: three events that came about almost at one and the same time demanded a macro-economic response from the president. First, the US Federal Reserve System raised interest rates. Second, the International Monetary Fund (IMF) and the World Bank criticised the government at almost the same time. Lastly, oil prices have been falling gently for a week now.

Early in May, Putin said that he would hold a conference which he himself called "macroeconomic". The president had his reasons: the government did acknowledge, if not at once, that between March and May Russia had practically no industrial growth. This created an entirely new situation: while oil prices were storming the heavens, the economy was stalling. This could not but set anyone on guard, because until now oil prices have been the driving force of economic growth. They bolstered the rouble, while the strengthened currency in turn attracted investment, including from ordinary people's savings, and at the same time curbed inflation. And now growth has come to a standstill.

No official report was issued about yesterday's conference, with the presidential press-service limiting itself to announcing that it discussed a budget message. But it is known that the real firming of the rouble in 2004 is already 50 per cent over and above the ceiling set by this year's budget plan (the planned figure was 7%, while the growth has been 10%).

This means, Kommersant notes, that the Central Bank will inevitably have to take efforts to weaken the rouble - although how this can be done with the current very high oil prices is anybody's guess.

Central Bank governor Sergei Ignatyev cannot be envied: he is responsible both for the rouble exchange rate and for the inflation level. And even if he manages to depress the real rouble rate, this is certain to lead to increased inflation, Kommersant believes.