Medvedev: Crisis Hitting Real Economy

Ria-NovostiMedvedev looking into a microscope during his visit to an electronics factory in the city of Izhevsk on Wednesday.
President Dmitry Medvedev said Tuesday that the global financial crisis has spread to the real economy and that the many sectors in need of state aid will get it.

"Today, it is clear that the crisis is spreading, unfortunately from the financial sector into the sectors of the real economy," Medvedev said, acknowledging for the first time that the crisis previously described as global is spreading into the heart of the Russian economy.

"Every industry is affected in its own way. It is impossible to say that one among them is sitting pretty and will not get state money," he said.

Russia is pushing ahead with a $200 billion state aid package, and the Central Bank has spent tens of billions of dollars propping up the local currency in recent weeks as investors pulled money out of the country and its stock markets.

The country will need to spend more of its wealth, amassed when global demand for its commodity exports was booming, to help the economy, Medvedev said in Izhevsk, the capital of the central Russian republic of Udmurtia.

"About 5 trillion rubles ($182.3 billion) will be spent on stabilization measures. But this is not the final number. We understand that the scale of the problem is such that additional decisions will be needed," he said.

The president also gave assurances that despite the global economic crisis, the country will meet all the commitments it made to other G20 countries and not resort to protectionist measures.

The country's commitment to free trade has been questioned after it announced that it will raise import duties on secondhand cars and intends to review trade agreements with several countries, including the United States.

"I expect the Russian government to take every step needed to carry out these obligations," he said.