MOSCOW, Dec 24: The year 2001 was successful for the Russian economy which expanded more than expected and living standards improved, President Vladimir Putin said on Monday.

We planned growth of the economy at four per cent. Growth turned out to be 5.5 per cent, although the final figures will be known by the end the year, Putin said, answering questions on live television.

Industrial output growth will be 5.2 per cent.

Russia posted a record 8.3 per cent GDP growth in 2000 when industrial output increased 9.5 per cent on the back of high prices for Russia’s traditional exports — energy and metals.

But Putin said Russia had failed to reach the target for inflation, one of Russia’s most serious economic problems this year. The government had initially budgeted consumer price inflation at 12-14 per cent after 20.2 per cent in 2000, but later had to revise it to 17-18 per cent.

It is lower than last year, but not the one we budgeted, Putin said. CPI rose 18.6 per cent in November in year-on-year terms.

Putin praised the agricultural sector, which harvested 83.7 million tons of grains this year after 65.5 million tons in 2000. We haven’t seen such growth in many years, he said.

He said that people’s income increased 6.5 per cent after 6.0 per cent in 2000 with average wage increasing some 20 per cent.

We can easily say that the year of 2001 was successful for Russia, Putin said.

Putin said that lower prices for oil, one of Russia’s main hard currency earners, could damage the country’s budget for next year but households would not feel the impact.

Our budget has been calculated on the basis of a so-called “pessimistic” scenario of the developments on raw materials markets, including the markets of oil and gas, he said.

That is why we are not very scared, to be honest. Although if the price falls very low and keeps so for a long time, we shall have some budget difficulties, but social obligations to the population will be fulfilled.—Reuters