MOSCOW, April 20 (Reuters) - Prime Minister Vladimir Putin said Russia's recession is over, pledged budget and healthcare reforms and pressed ahead with a hike in social contributions in an address to parliament on Apr. 20, but he kept silent on the rouble.
Putin, who likes to project the image of a healthy leader, looked to be suffering from a cold and was visibly ill as he spoke with a trembling voice and coughed regularly.
His speech and his replies in a question and answer session lacked the salty jokes that have become his personal trademark. Putin, whose speech came under scrutiny from bankers attending a Russian sovereign Eurobond roadshow in the U.S., said Russian economic growth might exceed the official forecast of 3.1 percent in 2010.
"Provisional results for the first quarter fuel optimism… This allows us to say that the recession is over. This does not mean that the crisis is over," Putin said.
Finance Minister Alexei Kudrin said growth could reach 4 percent — erasing roughly half of the contraction seen in 2009.
Putin, Russia’s most popular politician in opinion polls, stepped down as president after eight years of oil-fuelled economic boom to become prime minister only months before the economic crisis struck.
Investors pick through his public speeches and behaviour for any clues to his political future, but he made no reference to the 2012 presidential elections.
Putin credited his government with averting an economic collapse similar to the 1998 financial meltdown, but said some measures could have been more effective while others — such as a car scrappage scheme — should have been implemented earlier.
He said Russia should spend state money more wisely rather than increase the tax burden on the fragile economy and proposed fiscal reforms aimed at halving the budget deficit to 3 percent of gross domestic product (GDP) by 2012. He was vague on details.
HIKING TAXES, SILENT ON ROUBLE
Russia will however proceed with a planned hike in employer social security contributions to 34 percent from 26 percent from next year, a measure staunchly opposed by business lobbies, Putin said, with the money being used to reform the healthcare system. "More than 30 percent of the country’s medical institutions are in a critical state or require a financial overhaul. Therefore, within the next two years, we will assign about 300 billion roubles ($10.3 billion) to bringing the country’s health system to order."
Companies had hoped some of the increase would be delayed, as proposed by the Finance Ministry.
The speech was focused on social initiatives, from trumpeting a planned 45 percent increase in the average pension to 8,100 roubles ($278) a month, to promising more wide-ranging financial benefits for mothers and housing for war veterans.
Putin, who said several times during his speech that Russia needed responsible macroeconomic policy, did not mention the strengthening rouble, which some say represents the biggest single threat to his plans to return Russia to a growth path.
He also steered clear of flagging any measures to attract foreign investors — which Kudrin said earlier this month are being discussed and should be unveiled soon [ID:nLDE6350FU] — and gave no advice on rates.
Analysts think Russia’s central bank is nearing the end of its interest rate-cutting cycle which started a year ago.
Potential investors in Russia’s Eurobond may also have been disappointed, though not deterred, by a lack of new concrete measures to help diversify the economy from oil.
Putin faced some critical comments from the opposition, including Communist leader Gennady Zyuganov, who said the government was heading for a no-confidence vote but received unexpected support from Uzbek leader Islam Karimov.
"I see that you look tired, not entirely healthy, I mean. It is obviously cold. But I know you as a very hardy person, I hope that this cold will soon go away," the authoritarian Uzbek leader said during the meeting with Putin after the speech.
Putin, who travelled to the Arctic last weekend, postponed a working trip to southern Russia planned for April 21, where he was supposed to meet the management of Russia’s No.2 oil firm Lukoil and visit their offshore platform in the Caspian.
His spokesman Dmitry Peskov declined to comment on Putin’s illness.
