Shrinking trade harms both Russia and EU: Putin

Shrinking trade between Russia and the European union   (EU) harms both economies, President Vladimir Putin said Monday, citing falling crude prices and unfavorable financial situations as the causes of the decline.

"No one gains interests from the current trade declines between Russia and its major trade and economic partners of European countries," Putin told a meeting with Parliament's representatives.

Declining trade turnover, caused by falling global fuel prices and unfavorable financial situation, limited possibilities for Russian companies' development, Putin said.

While Russia's trade with EU decrease by 4.3 percent, trade with the United States has increased by 7 percent, Putin said. Trade with the Asian-Pacific countries is also on the rise, he added.

Noting that Russia's capital outflow will reach 120-130 billion U.S. dollars in 2014, Putin said that the trend was possibly " inward-oriented" as 50 percent of current capital outflow is due to currency exchange operations done by Russian citizens. "So that money actually still stays in Russia," he added.

Meanwhile, the loan payments of Russian companies due in the fourth quarter of this year, which amounted to around 115 to 130 billion dollars, also contribute to the massive capital outflow, he added.

"Despite the challenges we are facing, we will overcome all difficulties and develop further," Interfax news agency quoted Putin as saying.

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