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    Russian Economy General News: #8

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    Austin
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    Re: Russian Economy General News: #8

    Post  Austin on Thu Mar 16, 2017 6:19 am

    Far East received a two-year $ 25 billion investment

    https://ria.ru/economy/20170315/1490030253.html

    "In the Far East created unprecedented conditions for the economic development of the territory, such as the territory of priority development (TOP), a free port of Vladivostok, state targeted support investment projects, preferential financing fund development of the Far East. This has allowed for two years to attract $ 25 billion investment, and with taking into account the large-scale projects for gas processing and petrochemicals, which are considered by the government, this would amount to 60 billion, "
    - are reported quote from the speech of Deputy Prime Minister Yuri Trutnev at the" round table "with representatives of the Vietnamese business in Hanoi.
    According to Trutnev, as part of new development tools in the Far Eastern Federal District, running 500 investment projects. In this case more than 30% of the total investment - is an investment of foreign investors.

    As Minister for Development of the Far East Alexander Galushka previously noted, in the macro-region to create competitive conditions for economic development in comparison with Asia Pacific countries.

    "With new support measures for investors - the top, the free port of Vladivostok, the target state support of investment projects, preferential financing fund of the Far East - are already creating new factories, new businesses, new infrastructure," - said Galushka.
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    Re: Russian Economy General News: #8

    Post  Regular on Fri Mar 17, 2017 8:59 am

    Number of dollar billionaires up 11% in Russia last year, at the same time, the number of billionaires in Europe declined by four percent


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    kvs
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    Re: Russian Economy General News: #8

    Post  kvs on Sat Mar 18, 2017 12:04 am

    Regular wrote:Number of dollar billionaires up 11% in Russia last year, at the same time, the number of billionaires in Europe declined by four percent



    This is a valid economic indicator and does not support the notion that Russia's economy is struggling. I suspect some sort of shenanigans
    or serious errors in the GDP growth estimate. GKS uses a GDP deflator based on the CPI and PPI which are estimated by the CBR. The
    CBR does not know what inflation is. Inflation can only be properly defined under an equilibrium pricing regime. Believe it or not but Russia
    is still undergoing pricing transitions after 1991. It is 26 years later and the prices have not reached equilibrium yet. For example take
    the price structure in military industry: six Project 636.3 boats for the price of one Japanese Soryu. The 636.3 is not six times cheaper
    or less capable than the Soryu by an stretch of the imagination. Soviet style quid pro quo economic activity which was aggravated by
    barter during the 1990s (due to massive payment arrears) has not completely disappeared. This is yet another price transient since replacing
    these free services (like companies engaged in community support) will produce massive "inflation" in this sector.

    The bottom line is that the CBR grossly overestimates the CPI and PPI by treating transition pricing as inflation. This is obvious nonsense
    since Soviet prices and free services are not a valid reference point to define the price change. When the CBR was measuring an inflation rate
    of 15% it was likely that the real inflation was 8% and the current 7% is more like 4-5% (the spread is shrinking, slowly). An overestimation
    error in the PPI and CPI will introduce an error in the GDP growth:

    The real GDP in year X is GDP in nominal rubles divided by 1+(w1*CPI+w2*PPI)/100, where w1 = 1-w2 are the fractions of consumer and industrial
    sectors. If the CPI=PPI=10% according to the CBR but in reality CPI=PPI=7% then we have:

    GDP/1.1 instead of GDP/1.07 or an error of 1.1/1.07 = 1.028 so the real GDP estimate is almost 3% smaller than in actuality; if the
    GKS GDP growth is -1% then it actually +2%.

    The GDP is really bound to the physical economy. Treating zero price activity as zero GDP is wrong. You have to estimate a price for
    these transitioning sectors which reflects their market value and physical volume. If the physical volume decreases then the GDP contribution
    shrinks and vice versa. So the adjusted price can be kept constant and adjusted year to year based on production or service volume.
    This is a challenging thing to do, but that's just life. Pretending that the transition prices are inflation is simply wrong since under equilibrium
    conditions price shifts reflect relative production volume contributions (same production, higher price => CPI/PPI increase which then offsets
    GDP increase since GDP is about production and not price) while transition price increases do not indicate any production volume decrease.

    The problem is that different parts of the economy have reached different levels of equilibrium and a single CPI and PPI is being used for
    all these parts. If every price transition was on the same curve then the CBR methodology would be fine. But by using a globally derived
    CPI and PPI which treats transition price increases as inflation, it overestimates real inflation in sectors closer to equilibrium. Even weighting
    these different parts of the GDP by their size will not hide the distortion.
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    Kimppis
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    Re: Russian Economy General News: #8

    Post  Kimppis on Sat Mar 18, 2017 11:41 pm

    Well, they just changed their "methodology" and GDP growth rates for the last few years improved quite a bit. For 2015 -2.8% vs. the older estimate of -3.7% and for 2016 -0.2% vs. -0.6%. So if they keep the same adjustments into the future, this years should also be considerably better than their forecasts. Previously they were talking about a growth of around 1.5% (lately they have been talking about 2%), so it's possible the growth could reach something like 2.5% this year. But we'll see...
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    Re: Russian Economy General News: #8

    Post  kvs on Sun Mar 19, 2017 5:03 am

    Kimppis wrote:Well, they just changed their "methodology" and GDP growth rates for the last few years improved quite a bit. For 2015 -2.8% vs. the older estimate of -3.7% and for 2016 -0.2% vs. -0.6%. So if they keep the same adjustments into the future, this years should also be considerably better than their forecasts. Previously they were talking about a growth of around 1.5% (lately they have been talking about 2%), so it's possible the growth could reach something like 2.5% this year. But we'll see...

    Those are not changes in methodology, they are minor adjustments. The -0.2% or -0.6% GDP growth estimate for 2016 is simply not credible. Millionaires and billionaires
    don't increase by 10% if the economy is contracting.
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    Re: Russian Economy General News: #8

    Post  Singular_Transform on Sun Mar 19, 2017 10:18 am

    kvs wrote:
    Kimppis wrote:Well, they just changed their "methodology" and GDP growth rates for the last few years improved quite a bit. For 2015 -2.8% vs. the older estimate of -3.7% and for 2016 -0.2% vs. -0.6%. So if they keep the same adjustments into the future, this years should also be considerably better than their forecasts. Previously they were talking about a growth of around 1.5% (lately they have been talking about 2%), so it's possible the growth could reach something like 2.5% this year. But we'll see...

    Those are not changes in methodology, they are minor adjustments. The -0.2% or -0.6% GDP growth estimate for 2016 is simply not credible. Millionaires and billionaires
    don't increase by 10% if the economy is contracting.

    It makes sense, the middle / poor people getting poorer, the wealthier receiving more money and more wealth.

    It is wealth distribution, take away from the poor and give it to the rich.

    Past three years was about it, check the portion of wages/salaries from the GDP.
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    Re: Russian Economy General News: #8

    Post  kvs on Sun Mar 19, 2017 2:17 pm

    Singular_Transform wrote:
    kvs wrote:
    Kimppis wrote:Well, they just changed their "methodology" and GDP growth rates for the last few years improved quite a bit. For 2015 -2.8% vs. the older estimate of -3.7% and for 2016 -0.2% vs. -0.6%. So if they keep the same adjustments into the future, this years should also be considerably better than their forecasts. Previously they were talking about a growth of around 1.5% (lately they have been talking about 2%), so it's possible the growth could reach something like 2.5% this year. But we'll see...

    Those are not changes in methodology, they are minor adjustments.   The -0.2% or -0.6% GDP growth estimate for 2016 is simply not credible.  Millionaires and billionaires
    don't increase by 10% if the economy is contracting.

    It makes sense, the middle / poor people getting poorer, the wealthier receiving more money and more wealth.

    It is wealth distribution, take away from the poor and give it to the rich.

    Past three years was about it, check the portion of wages/salaries from the GDP.

    But there is no evidence of such a change in the income curve.   The bitching about it in the anti-Russian media was over the last
    15 years related to the relative increase of the rich vs. the lower income brackets.  All segments of the population were
    getting wealthier.   And your "makes sense" actually doesn't since it would be a pure catabolic process where the "1%" was
    reducing the wealth of the "99%".  This would accelerate GDP contraction.

    And just what sort of catabolic processes do you propose to explain this alleged inequality spreading?  

    http://www.tradingeconomics.com/russia/wage-growth

    There was no contraction in real wages in 2016 and they actually started to grow over the last
    six months.  So there is no catabolic income redistribution.
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    Re: Russian Economy General News: #8

    Post  Kimppis on Sun Mar 19, 2017 7:02 pm

    Exactly, they made methodological adjustments, the same thing...

    Yes, Russia's GINI index is quite normal by global standards. Worse than in Western Europe, but pretty much exactly the same as the US. Although there are a lot of billionaires in Russia vs. the overall number of millionaires.

    HOWEVER, isn't the number of (dollar!) millionaires highly related to the exchange rate? So the number of millionaires probably fell by quite a bit in 2015 and now it's simply recovering, especially when the ruble strengthened.
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    Re: Russian Economy General News: #8

    Post  kvs on Sun Mar 19, 2017 7:40 pm

    Kimppis wrote:Exactly, they made methodological adjustments, the same thing...

    Yes, Russia's GINI index is quite normal by global standards. Worse than in Western Europe, but pretty much exactly the same as the US. Although there are a lot of billionaires in Russia vs. the overall number of millionaires.

    HOWEVER, isn't the number of (dollar!) millionaires highly related to the exchange rate? So the number of millionaires probably fell by quite a bit in 2015 and now it's simply recovering, especially when the ruble strengthened.

    You are right, the exchange rate is a factor. But 10% is too much for it to be the only factor. Most billionaires are not sitting at 1.0 billion but have several. The same is true for millionaires as well. This due to the hyperbolic income distribution curve. The "rich keep getting richer".



    https://www.theguardian.com/business/2014/nov/13/us-wealth-inequality-top-01-worth-as-much-as-the-bottom-90



    Americans have not recovered after the 2008 recession but the US rich have.

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    Re: Russian Economy General News: #8

    Post  Singular_Transform on Sun Mar 19, 2017 11:02 pm

    kvs wrote:

    But there is no evidence of such a change in the income curve.   The bitching about it in the anti-Russian media was over the last
    15 years related to the relative increase of the rich vs. the lower income brackets.  All segments of the population were
    getting wealthier.   And your "makes sense" actually doesn't since it would be a pure catabolic process where the "1%" was
    reducing the wealth of the "99%".  This would accelerate GDP contraction.

    And just what sort of catabolic processes do you propose to explain this alleged inequality spreading?  

    http://www.tradingeconomics.com/russia/wage-growth

    There was no contraction in real wages in 2016 and they actually started to grow over the last
    six months.  So there is no catabolic income redistribution.

    Click on you link to the "5Y" button and you will see the evidence.

    Austin
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    Re: Russian Economy General News: #8

    Post  Austin on Mon Mar 20, 2017 7:47 pm

    Watching the Senate Intelligence Hearing on Russian Interfering in US Election is an Epitome on Putin and Russian bashing Exercise.

    Putin is the big Devil and Russia the bad player in Global Scene and hostile to US.

    Makes me wonder why do the Idiot Russian even buy US Bonds which is worth $80 billion Today , Are they stupid or naieve or both.

    Why not buy bonds of friendly country like China or India or other nations , Why Reward the US even half a percent by buying their bonds ?

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    Re: Russian Economy General News: #8

    Post  Austin on Mon Mar 20, 2017 7:51 pm

    China 10Y bond earns 3.31 % http://www.tradingeconomics.com/china/government-bond-yield
    India 10Y bond earns 6.89 % http://www.tradingeconomics.com/india/government-bond-yield

    Earn more money investing in these bonds and make relations more friendly.
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    Re: Russian Economy General News: #8

    Post  magnumcromagnon on Mon Mar 20, 2017 9:38 pm

    Austin wrote:Watching the Senate Intelligence Hearing on Russian Interfering in US Election is an Epitome on Putin and Russian bashing Exercise.

    Putin is the big Devil and Russia the bad player in Global Scene and hostile to US.

    Makes me wonder why do the Idiot Russian even buy US Bonds which is worth $80 billion Today ,  Are they stupid or naieve or both.

    Why not buy bonds of friendly country like China or India or other nations  , Why Reward the US even half a percent by buying their bonds ?

    I agree, the CBR and the other major financial nodes are dominated by treasonous, poisonous snakes, that $80 billion could of been used to acquire S-500's and Nudol/235 ABM complexes.
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    Re: Russian Economy General News: #8

    Post  Singular_Transform Yesterday at 11:32 pm

    Austin wrote:China 10Y bond earns 3.31 % http://www.tradingeconomics.com/china/government-bond-yield
    India 10Y bond earns 6.89 % http://www.tradingeconomics.com/india/government-bond-yield

    Earn more money investing in these bonds and make relations more friendly.

    You can't buy them.

    The US running the biggest trade deficit, and it is the result of the liberal rules for investment .

    India / China restrict the foreigners in the investment opportunities, so you can't buy enought goverment paper from this countries to be able to run this magnitude trade surpluss like russia.

    Or you risk a very expensive rubel ,that destroy the competitivness of the home indurstries.

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    Re: Russian Economy General News: #8

    Post  Austin Today at 11:23 am

    Singular_Transform wrote:
    Austin wrote:China 10Y bond earns 3.31 %     http://www.tradingeconomics.com/china/government-bond-yield
    India 10Y bond earns 6.89 %    http://www.tradingeconomics.com/india/government-bond-yield

    Earn more money investing in these bonds and make relations more friendly.

    You can't buy them.

    The US running the biggest trade deficit, and it is the  result of the liberal rules for investment .

    India / China restrict the foreigners in the investment opportunities, so you can't buy enought goverment paper from this countries to be able to run this magnitude trade surpluss like russia.

    Or you risk a very expensive rubel ,that destroy the competitivness of the home indurstries.

    Cant say about China but in India FII are allowed to buy GSEC which is our Bond.

    I see now reason why Russian government cant purchase those bonds in Government to Government or Central Bank to CBR deal , Just a year or two back Russian Finance Minister had mentioned they would buy BRICS bond

    http://ndb.int/BRICS-Bank-plans-to-place-bonds-in-Russia.php


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    Re: Russian Economy General News: #8

    Post  Austin Today at 11:24 am

    5 more years for CB Chief

    Putin Nominates Bank of Russia Head Nabiullina for New Term

    https://www.bloomberg.com/politics/articles/2017-03-22/putin-nominates-bank-of-russia-head-nabiullina-for-new-term

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    Re: Russian Economy General News: #8

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