Government to Subsidize Russian Manufacturing Sector

Russian Prime Minister Dmitry Medvedev has signed a decree on the order of providing subsidies to encourage demand and improving the competitiveness of Russia’s manufactures, TASS news agency reports.

The document published on the cabinet’s website says the federal budget for 2020 envisions as much as 9.8 billion rubles ($157 million) allocated for such state support measures.

The rules have been approved to meet the demands of manufacturing corporations for production modernization. The state support mechanism will be available for a wide range of customers.

Particularly, the public procedure of equal access for participating in the qualifications-based selection, as well as concluding of agreements on providing subsidies and distribution of the number of subsidies among recipients has been defined.

“State support will allow raising the demand for Russian manufactures through providing incentives on lease agreements on manufactures to leaseholders,” the cabinet noted.

Russian manufacturing activity declined in December for the eighth straight month, pressed by challenging demand conditions. The Markit PMI index’s headline reading rose to 47.5 from 45.6 the previous month, which was its lowest level in over a decade.

“The Russian manufacturing sector remained in the doldrums at the end of 2019, with December data further extending the current run of deteriorating manufacturing health,” said Sian Jones, an economist at IHS Markit, which compiles the survey.