President Vladimir Putin named Alexei Ulyukayev, a central bank first deputy chairman, to take charge of Russia’s Economy Ministry and moved the current minister, Andrei Belousov, to the Kremlin as his aide.
The Kremlin announced the shuffle today as Elvira Nabiullina, previously the Kremlin economic aide, began her first day as central bank chairman. Ulyukayev, who oversaw monetary policy for former Bank Rossii Chairman Sergey Ignatiev for nine years, was passed over for the top job after Putin said in March that his choice would be “unexpected.”
Putin is struggling to halt a slowdown in the economy as a recession in Europe, which accounts for half of Russian trade, and weaker growth in China sap demand for exports of energy and metals. Russia will invest 450 billion rubles ($14 billion) from one of its sovereign wealth funds into infrastructure, tie tariff growth to inflation and take steps to lower lending rates and encourage encourage borrowing, Putin said last week.
“These personnel changes show that stimulating the economy and accelerating economic growth are becoming the top priority for Vladimir Putin,” Julia Tsepliaeva, head of research at BNP Paribas SA in Moscow, said by phone. “Ulyukayev’s appointment is very logical because of his extremely diverse experience, both in the Finance Ministry and the central bank.”
The ruble weakened 0.3 percent against the dollar to 32.8950 as of 12:50 p.m. in Moscow. The Micex Index of 50 stocks declined 0.4 percent to 1,293.54.
Belousov, who took over for Nabiullina as economy minister in May 2012, had previously served as the head of the government’s economy and finance department during Putin’s four years as prime minister.
“I want to stress that the strategic path we’ve chosen will remain unchanged,” Putin told attendees at the St. Petersburg International Economic Forum on June 21. “We’ll follow this policy regardless of personnel shuffles at the central bank and among economic policy makers in the presidential administration and Cabinet.”
Ulyukayev, 57, joined the central bank as a first deputy chairman in 2004 after serving as a first deputy finance minister with Ignatiev. He has opposed calls from the government, including Belousov, to lower lending rates to stimulate economic growth before inflation slows.
The ministry’s short-term task is to avoid a recession and ensure that the government is able to meet its obligations to the public, Ulyukayev said in a meeting with Putin following the announcement. Ulyukayev said he would also focus on creating the foundations for faster long-term growth.
“I’m deeply convinced that investments will be decisive now, and we need need to work together to create favorable conditions for private investment,” he said, according to a Kremlin transcript. “The situation isn’t simple. It’s one thing to stand and watch when growth is 7 percent; it’s another entirely when we’re struggling to scrape together 3 percent.”