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Putin, Prime Minister Paint Rosy Economy
June 12, 2003

MOSCOW (AP) - President Vladimir Putin and his prime minister said Wednesday that Russia was sailing smoothly through the peak year for its enormous debt payments.

Russia is due to pay a total of more than $17 billion in debt before the year is through, Putin told census-takers in a Kremlin meeting.

``In recent years, many people said that 2003 would be not only the year of debt repayment, but a crisis year. And they asked, 'How will we live through this year?''' Putin said, according to the Interfax news agency. ``We are living through it, and everyone, at least the experts, sees that the country has solved this problem.''

Prime Minister Mikhail Kasyanov, who as head of the Cabinet is the top official for economic policy, struck a similarly optimistic note in an address to the State Duma, the lower house of parliament.

Kasyanov's long-scheduled appearance came a day after the chamber scheduled a June 18 vote on a no-confidence motion against the Cabinet. The motion, proposed by the Communists and the liberal Yabloko party, has little chance of passing, since the pro-Kremlin majority has said it will vote against it.

However, Kasyanov, a Putin appointee, has increasingly come under fire from all sides of the political spectrum for what many consider slow economic progress, and some media have reported a growing rift within the Cabinet.

Kasyanov on Wednesday dismissed those reports.

``Everyone in the government is committed to common goals,'' Interfax quoted him as saying. ``Only the ways to achieve these objectives are a matter of debate.''

On economic issues, Kasyanov said that timely repayment of debts and other signs of economic health have brought growing foreign investment to Russia.

``In the first quarter of last year, capital flight was US$1 billion a month,'' Kasyanov said in televised remarks. ``This year, we have a net inflow of capital.''

Kasyanov said foreign investment in Russia amounted to $6.3 billion in the first quarter, the ITAR-Tass news agency reported. He said gross domestic product had grown 6.6 percent over the same period in 2002 and predicted that by the end of the year growth would match last year's 4.3 percent.

Many analysts say the current strength of the Russian economy is mostly a result of high oil prices. But Kasyanov said a drop in oil prices ``will not be able to shake the strength margin of the Russian economy,'' according to ITAR-Tass.

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