MOSCOW, Feb 2 (AFP): The Russian government has suggested that the slide in the value of the rouble may have a silver lining, but will it really help perk up the sluggish economy or just crimp consumption by consumers?
The rouble has been caught up in the sell off of emerging market currencies, losing about 6.5 per cent of its value against the dollar in recent weeks to hit a five-year low of more the 35 to the greenback.
And it has slid by around 5 per cent to a new record low of more than 48 roubles to euro.
However Economy Minister Alexei Ulyukayev looked to the bright side of things.
"This will help improve the competitiveness of a range of industries," he told Moscow's Prime business news agency.
"I am not a proponent of stimulating the economy through an artificial weakening of the rouble," said Ulyukayev.
"But since what we have now is not an artificial but a natural weakening ... then why not enjoy its positive effects?" he asked.
The government will feel an immediate boost as most of its budget revenue is from the export of gas and oil, which are sold for dollars.
The budget deficit was reduced to 0.5 per cent of gross domestic product last year thanks to higher oil prices.
But with growth at just 1.3 per cent -- a quarter of the Kremlin's target -- there is not enough funds for President Vladimir Putin to fulfil his 2012 election campaign promises.
"All the increases in social benefits will be financed," noted the daily Vedomosti. "Of course with roubles that are worth less, but they will be financed." Economist Nikolai Petrov at Moscow's Higher School of Economics believes the rouble's slide was intended.
"The government, which is trying to make ends meet and must find US$15 billion for Ukraine, went consciously in that direction," he told the news agency.
The budget pinch has led the government to hold off on financing several flagship projects that are designed to boost growth, such as the high-speed rail link between Moscow and the city of Kazan to the east.
