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Wednesday, 24 November, 1999, 19:30 GMT
'New life' in Russian economy
Prime Minister Putin's comments were praised by deputies

Russian Prime Minister Vladimir Putin has said his country's ailing economy is now "bursting with new life".

"For the first time since the start of reforms, we have sustained growth over a span of 14 months," Mr Putin told parliament in a speech on the state of Russia's economy 100 days into his term.

"This is the result of the sharp devaluation of the ruble (in August 1998) ... and the high oil prices that, thank God, continue to rise."

He told Russian deputies that inflation during the first 10 months of this year was 31.5%, well below an annual forecast of 50-60%.

Meanwhile, industrial production has jumped 7.5% compared with the same period last year.

As a result, he said Russia had managed to cover its entire backlog of arrears to pensioners while lowering the debt bill to state employees by 31% so far this year.

Russia's economy fell apart in August 1998 when the government, facing a crippling debt burden, froze its securities market and effectively devalued its currency the rouble.

A string of Russian governments since then have co-operated with the International Monetary Fund and managed to avoid inflationary money printing to cover outstanding wage arrears and pensions.

But the Fund is still considering whether it will resume lending to Russia after the scandal over the money laundering of Russian funds in Western banks.



First economy speech applauded

The economy has taken a backseat in recent months as Russia has concentrated on its crackdown on the rebel republic of Chechnya.

However, the state of the country's finances are under the microscope again as legislative elections are due next month.

Mr Putin's comments were his first major set-piece speech on the economy since his endorsement by parliament as cabinet chief on 16 August.

His words were applauded even by anti-government Russian lawmakers.

"He answered our questions well," said leading deputy Vladimir Ryzhkov.

Meteoric rise

A former KGB-spy master, Mr Putin was brought in as Russia's fifth premier in less than two years when President Boris Yeltsin sacked Sergei Stepashin after barely 80 days in the job.

Mr Putin's popularity has soared since he took office, turning him from a political unknown into a leading contender to succeed President Yeltsin next summer.

Most Moscow newspapers applauded his performance in their 100-day reviews of his achievements, although several pointed out that his rating would proabably suffer if the Chechen campaign were unsuccessful.

Mr Putin said the Chechen campaign had so far cost the government 3bn roubles (71.5m).

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