Russian Economy General News: #1

AFAIK it is already a bit of a resort town for skiing in winter.

The idea if having the Olympics there was to upgrade infrastructure and to aide growth and promote development.

A lot of things like large venues that would otherwise stand empty after the games are designed to be able to be taken down and moved elsewhere so it is actually a good thing really.

Some views of mine:-

1)Sochi.
Its hard to evaluate the expenditure of Sochi without doing some heavy number crunching.
But to me, it looks very likely to be worthwhile. Its a showcase for Russia to attract visitors and inward investment/collaboration. It also means Russians and non-Russians have a wonderful option for holidays in both Summer, Winter and in between. It will also become a great place to locate businesses - hi tec and other. Some foreigners will think "ahh Russia is always cold and dark". But when they see Sochi, they will think of an entirely different Russia.

2)Problems.
I think its easy to see some of the problems of Russia. A big one is demographics  - people leaving, people retiring and less working age people. There's also the emergence of shale oil. And powerful new rivals like China, the EU, Asia etc etc. Russia is a super-power, but it doesn't bully the global economy - in the way the US has. There's also a entreprenuerialism problems, a small lower middle class income group. And there aren't many "global brands" from Russia yet. Civil aviation, hi tec, cars etc are still emerging. Finally, the banking sector isn't that helpful to business yet. And far from Moscow, there are still a fair number of people below the poverty line

3)Solution.
Ofcourse, like all countries, Russia has its challenges. But it also has its strengths.
Westerners can talk about "stagnation". But much of that is relevant for foreign investors, and Western economic ideologies only. Whats really important is sustainable and high quality of life.
Putin is right when he talks about aiming for efficiency improvement.

Some things will take time to develop. Hi-tech, Arctic resources, civil aviation, vehicles, banking and finance. Likewise with tourism and other things. The Customs Union will take time to develop - in terms of identity and ambit. Ofcourse the 1st wave of growth was built around oil prices and hasn't filtered thro to large parts of society. Russia has expertise and resources, much for other countries to be extremely jealous of. So I think people should be optimistic and bold, but also pragmatic and not show complacency. Personally, while I think its very sad to see people suffer under "free market" systems, there ARE also reasons to be very excited about Russia's future.

^^ How would Russia increase Effeciency of its workforce , Putin was stating to increase effeciency 6x times.

As far as Ukraine going , its better Russia stop giving them Sops to join CU ... if they want to join EU then so be it ....the only concession Russia should extract is Ukraine will not join NATO and be Neutral and Black Sea Fleet remain there.

EU/Eurozone is any way a dying state and Ukraine is in ICU adopting such countries in CU with lots of SOPS will make Russia a Sick patient from the healthy state it is in

Austin wrote:^^ How would Russia increase Effeciency of its workforce , Putin was stating to increase effeciency 6x times.

As far as Ukraine going , its better Russia stop giving them Sops to join CU ... if they want to join EU then so be it ....the only concession Russia should extract is Ukraine will not join NATO and be Neutral and Black Sea Fleet remain there.

EU/Eurozone is any way a dying state and Ukraine is in ICU adopting such countries in CU with lots of SOPS will make Russia a Sick patient from the healthy state it is in

This logic is nonsense.

Why going on a sinking ship just because it is the "Black Pearl" rather than going on a ship with a none hyped name that actually swims on the water and not below.

This is nothing else but what the US did before just to weaken and losse more and more the former USSR countries from russia, trying to take better global positioning around russia. They faked one color revolution after another, that is no secret, they bribe and invest hundreds of millions each year to harm reputation of russia that people get the perception of who is bad and who is "good". They even paid such retarded groups like FEMEN. Here in germany there was a documentation about FEMEN which tried to make them look good and russia and ukraine bad along with putin, but they made one huge mistake. When the reporter asked in an interview what they do for living, they said:

We are studying and we get asked by a western company to demonstrate for that and this and we recieve 10.000$ per month. wrote:

Lot of demonstrations were financed and performed by western countries especially and constanly through the US. In russia they invited "gast-arbeiter" to russia to demonstrate and get paid for that, some phony "pro-putin" demonstration were also performed in same manner to blame putin that he ordered foreigners to do that for him.


And ukraine is the same case, there is no logic behind that to join a sinking ship that brings absolute nothing in short nor long term to Ukraine.

 

Russia national debt clock

Not sure if that debt data is reliable as it shows GDP ~ $1.5 Trillion but today GDP is $2 trillion

‘If you build it, they will come’ - Russia's financial field of dreams

Russia pivots towards industry, not reliant on oil - Medvedev

Austin wrote:Not sure if that debt data is reliable as it shows GDP ~ $1.5 Trillion but today GDP is $2 trillion

Tnx Austin. Did not notice that - but nevertheless info seems true.

Viktor wrote:

Austin wrote:Not sure if that debt data is reliable as it shows GDP ~ $1.5 Trillion but today GDP is $2 trillion

Tnx Austin. Did not notice that - but nevertheless info seems true.

Russia Domestic Debt is around 11.5 % of GDP today

Russia External Debt is around 34 % of GDP

http://www.cbr.ru/eng/statistics/print.aspx?file=credit_statistics/debt_sustainability_e.htm

Ministry raises Russia’s surplus forecast to almost $175 bln in 2013.
http://en.itar-tass.com/russia/711036
Russia
December 11, 1:12 UTC+4

MOSCOW, December 10, 22:51 /ITAR-TASS/. Russia’s foreign trade surplus is projected to be at 174.4 billion U.S. dollars in 2013, Deputy Economic Development Minister Andrei Klepach told reporters early this month.

In 2013, Russia’s export is forecasted at 515.4 billion U.S. dollars (initially - 511.4 billion U.S. dollars), while import - at 341 billion U.S. dollars (earlier - 343.5 billion U.S. dollars), the deputy minister said.

Under the ministry’s estimate, next year’s export will be at 504.6 billion U.S. dollars, while import - at 349 billion U.S. dollars. Therefore, the foreign trade surplus will make up 155.6 billion U.S. dollars in 2014.

Earlier, the Economic Development Ministry forecasted Russia’s surplus at 169.7 billion U.S. dollars in 2013 and at 152.8 billion U.S. dollars in 2014.

 

Russia to get tens of billions of dollars from de-offshorisation of economy

Everyone Needs To Remember That Ukraine Is Not A 'Prize' But An Enormous Liability

@Austin,

this guy in your link who happens to have studied in the pinnacle of American education and work as a professional analyst specializing -supposedly- in Russian economy and DEMOGRAPHICS
is such a cheap crook that he stated somewhere in the middle of his article:

The other thing to keep in mind is that Ukraine’s population is collapsing and that this collapse shows no sign of abating. Everyone knows that Russia is “dying” and that it’s aging and shrinking population will doom it to economic, military, and diplomatic irrelevance.

He seems to ignore the U-turn Russia's demographics achieved once national policy focused on increasing fertility rates. From 1.40 climbed to 1.70 in a matter of five years and this year's performance should be at 1.77 and this is only the beginning... while in the same time Europe's ...sample of countries... score miserably and captain Germany scores second worse worldwide after only Japan... And US itself is a matter of 3 years increase to grasp if not for blacks and Latins...

So much for this self-claimed experts...

By the way, this demonstrates once more what I said in the last post about confidence. Americans having nothing but arrogance and optimism hope that they will panic away their opponents and to my amazement Russians and Indians still bite from time to time...

Forbs is crap, muvh like WSJ, Bloomberg and Fox. So called experts but no real evidence. So calledvprofessionals were saying about Russias impending doom in the early 2000's.

Although, I think the guy may have been sarcastic, cause his own graph would have proved him wrong.

I hope this works !! Russians could use this money.

Russia to Get Tough on Shadow Economy


and few days later

Top Russian Companies Pledge to Reduce Offshore Dependency

Putin on WTO 

Russia’s WTO entry will protect its exporters – Putin
“We are yet to reap its fruits, we are set to do it sooner or later,” he added.

As with the Sochi ... I hope it pays well, but on the other hand as in all the other similar events its all about presenting themselves in a good light and changing people altitude towards Russia

so    

Russia to host most expensive World Cup ever

Putin calls for careful use of ‘safety cushion’ reserves
http://en.itar-tass.com/economy/712671

MOSCOW, December 23. /ITAR-TASS/. Russia can and should use assets from the National Welfare Fund but it should do so very carefully, President Vladimir Putin said, adding that this “safety cushion” must be treasured.

“The decision has already been made to develop infrastructure. These are infrastructure projects that will produce noticeable, clear and tangible results. Such projects have been approved and will be implemented,” Putin said on Monday, December 23.

He admitted that global economic problems had affected Russia too. “The situation in countries with a well-established market economy has slightly improved but still it is not what it should be,” he said.

The European Bank for Reconstruction and Development has lowered its forecast for global economic growth from 3.5 percent to 1.5 percent in 2013. “I think it will be less than that this year, something around 1.4 percent, no more. There has been a substantial decline throughout the world. Some Eurozone countries are still in recession and we will see no figures above 1 percent in the Eurozone as a whole, 0.5-0.6 percent maximum,” the head of state said.

“Russia is not much different from the global economy in this respect: the same trends, or even better, as in European countries - 1.4-1.5 [percent of growth]. We shall see after the end of the year,” he said.

At the same time, Putin warned against self-complacency. “We should overcome internal problems such as the affordability of loans, development of infrastructure and improvement of the business climate,” Putin said at a meeting of the State Council, which is an advisory body to the president, which deals with issues of the highest importance to the state as a whole.

His statement came as a reply to Communist Party leader Gennady Zyuganov’s remarks that the implementation of the tasks set by the State Council was hindered by serious problems and his call for investing 20 trillion roubles in the modernisation of industry and in high technologies and security of people, and another 5-6 trillion roubles in the implementation of the president’s decrees issued in May 2012 after his inauguration.

“In order to implement the programme as a whole, GDP should grow at a rate of at least 5 percent. If we look at the forecasts made by our economists three years ago, they said that GDP would grow by about 8 percent this year. But we have slid down to less than 1.5 percent and there are no signs of improvement next year,” Zyuganov said.

He said China would report 7.5 percent this year, the United States 2.4 percent, and the global economy would grow by 3 percent this year and 4 percent next year.

Zyuganov said Russia needed a new financial and economic policy in order to fulfill its goals.

Finance Minister hopes Russia’s budget deficit to be close to 0.5% of GDP this year
http://en.itar-tass.com/economy/712687

MOSCOW, December 23, 21:39 /ITAR-TASS/. Russia’s federal budget deficit may be at about 0.5-0.6 percent of the Gross Domestic Product (GDP) in 2013, Russian Finance Minister Anton Siluanov told reporters on Monday.

Proceeding from the Finance Ministry’s estimates, this year’s federal budget deficit will amount to 400 billion roubles, while revenues will make up 12.9 trillion roubles and expenditures - 13.3 trillion roubles (USD 1 = RUB 32.95).

“This year’s deficit is projected at 0.5-0.6 percent of the GDP,” Siluanov said, adding, “I am hopeful that it will be close to a half percent.”

According to the minister, this year’s petroleum deficit gains 10.2 percent of the GDP. In the future, the ministry hopes for the decrease of the indicator to 9.4 percent in 2014 and to 8.4 percent in 2016.

Moreover, the Finance Ministry plans “to return to the accumulation of money in the Reserve Fund” already in 2014, Siluanov said. The finance minister also pointed to the need of tougher budget discipline.

Deputy PM: reasons for Russia’s economic failures lie within, not outside
http://en.itar-tass.com/economy/712652

MOSCOW, December 23. /ITAR-TASS/. Russia should look for the causes of its economic failures within, not outside, Russian First Deputy Prime Minister Igor Shuvalov told TV channel Rossiya-24 Monday.

“Efficiency and costs are number one issue,” he believes. “We should not be blaming bad foreign markets, but trying to find the reasons for failures inside the country.”

Shuvalov added the authorities were aware of the underlying reasons for the failures as well as the need to work for greater efficiency within the budget opportunities available.

Meanwhile, high oil prices are not an excuse to spend as much as you can: “We should restrain ourselves here, those in power should restrain themselves, setting certain limits society can easily understand.”

Shuvalov noted a number of the primary issues, among them that of fighting with offshore schemes. This is important, he said, both economically, for instance for the purpose of eliminating tax evasion, double taxing or other “fiddling”, and psychologically.

“We should have more trust towards our own jurisdiction. Why is any other insular jurisdiction better than our own, Russian?” Shuvalov wondered.

About his own assets, Shuvalov reiterated they had long been entirely transferred to Russia.

Not sure where to post but

How Putin Outfoxed the West

Russia's Economy Is Decelerating Sharply, But It's Still Close To Full Employment

I believe people over react with the economic slowdown. After all the economy still grows unlike most of Europe who despite the huge obfuscation of the real situation cannot hide that most of it's key players report zero or negative growth. So before Russia face a serious trouble Germany or France should burn to ashes. Besides:

Russia is still a non-industrial economy which relies way to much in natural exports. Naturally when everyone slows down and the demand is low they slow down as well. In this case the pretty much non existent debt and the nevertheless trade surplus save the day.

Second, soon the huge investments and trade agreements they took place the last years and been planned for the near future should make their way to real numbers. Industrial awakening takes time. In the meantime long awaited improvements and reforms should finally take place.

Finally since the West started this hideous economy war against the BRICS and gathered all the capital back to the stock markets Russia and the rest should immediately make the same and wait for the new Ponzi to collapse once again    Sure the stocks can't stay this high forever.

Last but not least, Eurozone and EU mast cease to exist. Only then the game of capital will be leveled on equal rules for all.

Austin wrote:Not sure where to post but

Russia's Economy Is Decelerating Sharply, But It's Still Close To Full Employment

How Putin Outfoxed the West

The Forbes article sound like there begrudgingly admitting that Russia's slowing down, but the unemployment is still at an all time low and conveniently forgets to mention Sochi next year, which is gonna be big for Russia.  
_______
I couldn't stomach Reading the entire Spiegel article, it feels like there congratulating Putin for his achievements while at the same time trying to portray him as some evil new Russian Tzar, who's dark and evil influence is growing like he was "The Dark Lord Sauron" or something, and if that wasn't enough they try to ignore the EUs aggressive expansion or try to portray them( the EU) as another innocent victim in all this.  

Ooh, and they also blame Russia (or Putin to be more precise) for Ukraine's withdrawal from EU negotiation, even though the EU was the one giving Ukraine a worst deal (less then a billion including IMF austerity BS, non-negotiable), and then bitch about Ukraine getting a better deal from Russia (15 billion and even China 8 Billion) as Putin's Evil Dark Grip, like Ukraine needed to be liberated or something.  
Typical western BS. 

Russian banks to suffer moderately if US winds up QE 2014

MOSCOW, December 24 (Itar-Tass) - Russian banks will suffer moderately, if the US regulator toughens its monetary policy next year, says the Central Bank of Russia’s (CBR) Financial Stability Review. Amid uneven global economic growth some developed countries, primarily the US, may start to unwind quantitative easing (QE) earlier than the others.

“The first consequence of QE tapering by the U.S. Fed will be growth of long-term interest rates, since the regulator targets short-term rates separately. The yield curve’s upward turnaround for long-term rates may have a negative effect on debt market environment. Sovereign debt markets of the countries with overly high state debt may prove the most sensitive to an increase of long-term rates. Troubled Eurozone countries may suffer most,” the CBR believes.

Meanwhile, Russia’s position in terms of sovereign and private debt risks looks quite steady. Russia is among the countries with the lowest state debt relative to GDP. As of October 1, 2013, Russian state internal debt accounted for 7.7 percent of the GDP, which is several times less than that of the other BRICS countries. Internal corporate debt (non-financial organizations’ loans in Russian banks and issued bonds) made up 36.5 percent of the GDP, whereas the total external debt amounted to 35.2 percent of the GDP, where private sector (banks and other sectors) makes up 31.3 percent of GDP.

“The effect of rate increase on the Russian banking sector’s net profit in foreign assets and liabilities may be limited because of low gapping. Interest risk’s impact on the non-financial sector is also moderate,” the Central Bank believes.

To estimate potential risks for Russian banks ensuing from financial market volatility following QE wind-up, the CBR has evaluated their securities portfolio. As of September 1, 2013, investments in bonds in shares accounted for 11 percent and 1 percent respectively. Revaluation of securities portfolio may have a substantial effect on certain banks and the banking sector as a whole. Stress scenario suggests an increase in yields on Russian sovereign bonds by 200 points, for other bonds - by 350 points, while stock prices are expected to dip 25 percent. The analysis has found out most of the banking system is resistant against negative scenarios in the stock market in terms of capital adequacy: capital adequacy ratio Н1 after stress is estimated at 12.1 percent (real figure as of October 1 was 13.4 percent).

Besides, adverse effect of tougher FRS policy may show in swap market, where transactions are prone to currency and interest risks. Interest rate swaps in one currency (more than half of the market) and cross-currency interest rate swap (about a third) prevailed in Russian interest rate swap market in the second and third quarters of 2013, with the rouble and dollar being the key currencies occupying over 90 percent of transactions, mostly medium-term. According to the CBR, if interest rates grow by 200 basis points, while the rouble depreciates 30 percent, Russian banks’ losses on the interest rate swap will not exceed 10 billion roubles (about $303 million). However, in the future, given dynamic development of the interest rate swap market, risks may escalate for certain market players.

The CBR report points out “a considerable share of non-residents in the market - in more than 95 percent of transactions, one of counterparties was a foreign company or a subsidiary of a foreign bank holding registered in Russia. Most transactions on the market are intragroup.”

The mentioned estimates indicate Russian banks’ potential interest losses are moderate. The estimated decline of Н1 below 10 percent as a result of stress-test of certain banks’ interest risk, is rather connected not to the scale of negative revaluation of loan portfolios but low capital adequacy before the stress, the regulator believes.

Cebr World Economic League Table

http://www.cebr.com/reports/cebr-world-economic-league-table/

http://www.cebr.com/reports/cebr-world-economic-league-table/#download-pdf