Dmitry Borisov: Good afternoon, Mr President.

President of Russia Vladimir Putin: Good afternoon.

Dmitry Borisov: Our call centre has been receiving phone calls for 12 days, and 2 million messages of various kinds have been received to this point. The top five of the most sensitive issues for Russians includes growing prices, declining living standards, housing and utilities, healthcare and of course, there are many personal requests.

Tatyana Remezova: That said, I would like to highlight a major difference from previous Direct Lines.

Most of the messages we have received are not about the present, but about the future: how will our country live in the years to come, what will its relations with other countries be like? This could be due to the fact that we are in a pre-election year, when people have more questions to their leaders, to you primarily, of course.

Dmitry Borisov: However, before we start talking about the future, let me begin with the present.

We have been hearing many optimistic assessments of the state of the Russian economy lately. Can we say, would it be right to assume that the economic crisis is over?

Vladimir Putin: You have started with a core question, whether the economic crisis is over. I would very much like to give an affirmative answer, thereby sending a positive signal to the people. However, in the back of your mind you cannot stop thinking that something could still go wrong, something could happen.

Nevertheless, when it comes to drawing conclusions of this kind we should be guided by objective data. What are the hard facts telling us? They are telling us that the Russian economy has overcome the recession, and moved into a growth trend. I will get back to this later to explain how this conclusion can be reached and on what data it is based.

But I would like to start by making a different point and highlighting the most pressing issues that have yet to be resolved. You mentioned them in your question, by the way. What are these issues all about? Real incomes have been declining over the last several years, and what is even more alarming is the growing number of people below the poverty line with incomes below the minimum living wage.

In this regard, Russia hit a low in the early and mid-1990s, when almost one third of the country’s population lived below the poverty line, almost 40 percent or 35 to 37 percent, according to various estimates, almost 40 million people. This was the all-time low, while the highest indicators in this respect were reported in 2012.

In 2012, 10.7 percent of the population was below the poverty line. Unfortunately, since then this number has reached 13.5 percent. It may not seem like a lot, just a few percentage points, but we are talking about tens, and hundreds of thousands of people, their lives, so this is a matter of serious concern.

There are economic issues that have still to be addressed, above all regarding real incomes. What are these issues? They have to do with the structure of the economy that we find unsatisfactory. In this connection I have to mention low labour productivity. There will be no new jobs, and incomes will not increase, unless we improve labour productivity. This is a major issue.

We will most definitely come back to these matters and I am 100 percent certain that people will have further questions and we will go into greater detail and look further at all that makes it possible for me to say now that the recession is over and we have seen economic growth for three quarters in a row now. GDP growth is modest, but it has nonetheless held steady from one quarter to the next.

GDP growth was plus 3 percent at the end of the fourth quarter of 2016, plus 5 percent in the first quarter of this year, and up 1.4 percent in April this year. This makes for GDP growth of 0.7 percent overall for the first four months of 2017.

Industrial production is also on the rise. We had growth of 0.7 percent in the first quarter of this year. I have brought along some of the latest figures, so as not to forget anything, and I can share them with you too. These are the latest statistics.

Investment into capital assets is up 2.3 percent. We see an increase in car sales and mortgage loans, which all economies consider a clear sign of growth, and non-resource and non-energy exports are up by 19 percent.

Finally, another important macroeconomic indicator is inflation, and we have brought it down to a record low in modern Russian history. The figure today is 4.2 percent. This is an unprecedented result and it gives us reason to expect that we will reach our target figure of 4 percent by the end of the year.

The Central Bank’s gold and foreign currency reserves, our international reserves, are growing. We started 2016 with $368 billion and ended the year with $378 billion. Today, the figure is $407 billion. One of the most significant indicators that I must mention is investment into capital assets, which is growing at a faster pace than the economy as a whole.

The economy grew by 0.7 percent over the first four months of this year, while investment into capital assets was up by 2.3 percent. What does this mean in simple terms? It means that investment in developing production facilities is up by 2.3 percent, and this is laying the foundations for growth in the short term. This, of course, is a positive development that will have an impact on various aspects of the social sector too.

Which aspects? The main social sector achievement that I want to mention once again is the substantial drop in infant and maternal mortality. Infant mortality has undergone a three-fold decrease since 2000, and maternal mortality has seen a close to four-fold drop. Probably no other country’s social sector has achieved such results. This has contributed to increased life expectancy as well. The figures here are now up from just over 70 years to 72 years. Overall, these results give us reason to say that we have overcome the crisis.

Tatyana Remezova: Mr President, you yourself spoke about people’s declining real incomes, and the official statistics confirm this. When will people feel the benefits of the reviving economy?

Vladimir Putin: You know, the decline was rather steep, and so it will take some time before people will feel an improvement. As I said at the beginning, I consider this to be the most important and serious problem.

Real wages started increasing in July or August 2016 and increased 0.7 percent by the end of the year. This increase is rather difficult to see, although it reached 2.3 or 2.4 percent in April this year.

As you know, we made lump sum payments of 5,000 rubles to pensioners early this year and increased pensions for non-working pensioners by 5.4 percent starting from February 1 and later brought the overall figure to 5.8 percent. We have also indexed social pensions.

We are working with employers to increase the minimum wage. We increased it by over 20 percent last year and have also raised it this year. Overall, we are working at this so that people can feel the improvements.