Putin Cautions on Easing Lockdown as Russian Economy Shows Pain

(Bloomberg) --

Russian President Vladimir Putin told regional governors not to rush to ease the coronavirus lockdown even as his top government ministers warned that pressure on the economy is intensifying.

“We can’t get ahead of ourselves,” Putin said at a teleconference with officials and governors on Wednesday. “Any negligence or haste can turn into a breakdown or moving backwards.”

Economic activity contracted by a third since lockdowns were enforced across most of the country at the end of March, Economy Minister Maxim Reshetnikov said at the meeting. Tax collection declined by 30% in April, while a quarter of Russian companies are in industries affected by the pandemic and will need support, Federal Tax Service chief Daniil Egorov said.

Putin called the meeting to discuss steps taken to support the economy and to consider measures to relax the nationwide self-isolation that is due to end formally on May 11. He has passed responsibility for the pace of easing the lockdown to regional governors, saying they should take account of the local spread of the virus in making decisions. Still, the meeting took place after Russia reported more than 10,000 new infections for the fourth straight day, lifting the total number of cases to nearly 166,000.

The economy is entering a more difficult period because non-payments could start disrupting supply chains, Acting Prime Minister Andrey Belousov told Putin. Demand from small- and medium-sized businesses for assistance is higher than the government forecast, he said.

In Moscow, which has about half of Russia’s cases, Mayor Sergei Sobyanin said restrictions on industry and construction may be eased from May 12. It’s still too early to consider reopening stores and services such as hairdressing salons, he said.

Putin said Sobyanin’s plan was acceptable. The government should coordinate easing of the lockdown measures nationally, he said.

©2020 Bloomberg L.P.

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