Russian President Vladimir Putin hopes that by the end of this year, inflation will be below 6% and thus will renew its historical low.

“Inflation amounted to 6.4% in the beginning of October in annual terms,” he said at the VTB Capital forum. Putin noted that during the same period last year, inflation was 15.7%. Putin said he counts on inflation of less than 6% at the end of the year, thus it will renew the historical low of 6.1%.

In recent years Russia managed to achieve “macroeconomic stabilization,” Putin has stated. For example, he cited “clear progress” in reducing inflation.

“We expect that by the end of 2016, inflation will update the historic low and will be below 6%. The lowest figure in the recent history of Russia was in 2011 – 6.1%,” he said. The President noted, “in 2017 we get closer to the target figure – 4%.”

According to the president, “volatility of the national currency also significantly reduced, international reserves of the Central Bank are growing.”

“Today the Central Bank reserves total around $400 bln,” he added.

Decisions on the banking sector
Decisions to “clean” the banking sector should be taken timely, Vladimir Putin warned:

“I believe the fault of the Bank of Russia, at least in prior years, is that such decisions should have been taken in due time earlier. However, better late than never.”

Rights of depositors and citizens should be protected, Putin said. “This should be done prudently, so that participants in economic activity and citizens do not suffer. Appropriate compensation should be paid promptly and in the amount provided by the law,” he said.

Consolidation of banking assets is a global trend, the head of state said. “Consolidation of banking assets occurs everywhere. Russia is not an exception within this meaning because no efficient market instruments to limit such consolidation have been found,” Putin said. Over 600 banks and financial institutions are currently working in Russia and this is enough for the country, he added.

“The budget for 2017 has been managed to be balanced with 3% deficit; this is an acceptable level even against the background of leading global economies,” the president emphasized commenting on the draft budget.

Nevertheless, even such level is significant for the Russian economy and “we should be very cautious in the course of budgeting and budget performance,” Putin added.

Putin added the return to three-year budget planning may be premature but he supports optimism of the Cabinet.

“I’d like to note that the government returned to three-year planning of the federal budget. Frankly speaking, it might be early to do so in current environment but the government has a certain portion of healthy optimism and I also support it,” the president said.