Russian Economy General News: #6

GarryB wrote:In translation... we can't deny things are going forward in Russia now despite our sanctions, but boy with our money invested in Russia the economy would really be booming and we would be making a lot more money... the only better option would be if you let us buy up anything of value and screw even more money out of your economy...

Why don't you listen to us?

We only have your interests at heart...

GarryB wrote:In translation... we can't deny things are going forward in Russia now despite our sanctions, but boy with our money invested in Russia the economy would really be booming and we would be making a lot more money... the only better option would be if you let us buy up anything of value and screw even more money out of your economy...

Why don't you listen to us?

We only have your interests at heart...

“There are strong fundamentals for this joint cooperation. NOVATEK has high quality resources for the implementation of new LNG projects, while PTT is expanding LNG supplies to Thailand and is interested in the sustainability of such supplies to their domestic markets. I’m certain we will be able to establish an optimal framework for efficient joint business development of our companies,” Chairman of Novatek’s Management Board Leonid Mikhelson said, as quoted in the statement.

"Each of the countries of the Eurasian economic Union need to agree on mutually beneficial terms of participation in this project (the extension of the FTA – ed.). But in any case, I think the successful implementation of the Vietnam project, as a pilot, will definitely speed up this work and with other countries ", — said the Morgulov told reporters.
Previously, he noted that the interest in establishing an FTA with the EEU are Thailand, Cambodia, Singapore, Indonesia.

GarryB wrote:When trying to convince the US to back these so called free trade agreements Obama basically said this is their chance to write the new trade rules and have control.

Of course the US wont benefit that much either... except the one percent that own the multinational companies that are actually writing the rules to allow them to ignore foreign rules on the environment, workers rights, and other such nonsense.

How else will they get GM foods and steroid pumped chicken into foreign markets?

GarryB wrote: they are going to do to international trade what Kraft did to cheese...  

Project Canada wrote:
The average salary in Russia is now lower than in China and Poland

Good news for manufacturing and exports   , but more points for West's anti Russian propaganda



Clothing brands may take advantage of weak ruble to move to Russia


I wish this gets done sooner so I can start ordering clothes made in Russia

I dont understand this free trade with vietnam.. with Russia.

Does this means ,that Vietnam is ditching the transpacific so called free trade
with United States?

Good news for manufacturing and exports russia , but more points for West's anti Russian propaganda Neutral

sepheronx wrote:Russia only became cheaper than Poland or China for foreign businesses is entirely due to exchange rates.  If lets say exchange rates goes to something like 45 rub/usd then that would make Russias average wage jump considerably

PapaDragon wrote:

Viktor wrote:Nice  

Russian Economic Development Ministry to Propose Raising Retirement Age

Makes perfect sense, average life span is much longer today than back when those rules were set up.

Oil Crash Shrinks Russian GDP; Energy Minister Blames Saudis

Russia’s oil-dependent economy appears headed for a second year of recession, and Energy Minister Alexander Novak says the blame falls squarely on the Saudis.

The Russian gross domestic product fell by 4 percent in November from its level in the same month in 2014, and had shrunk 3.7 percent in October from its levels a year earlier, the Economy Ministry reported Monday.

The reason, to no one’s surprise, is the plunge in oil prices over the past 18 months. The global average value of a barrel of oil has crashed from over $110 per barrel in the summer of 2014 to just below $40 per barrel today.

Because Russia’s government relies on oil production for half its revenues, it’s preparing for a 3 percent deficit in the budget for the coming 2016 fiscal year. Making matters worse, profits in any industry related to oil are down so far that it appears its current recession may last as long as two years.

“The risk of a deeper decline has intensified,” Andrei Klepach, chief economist at Russian state development lender Vnesheconombank and a former deputy economy minister, wrote in a report. He added that both bad economic and political news for Russia will contribute to “a stable negative trend, forcing downgrades in forecasts for next year.”

Related: Lifting The Oil Export Ban Could Be A Short-Sighted Action

The bad political news includes the Western sanctions imposed on Russia since 2014 because of Moscow’s involvement in the conflict in neighboring Ukraine. This also is bad economic news for Russia, but trumping that is weak price of oil, and Moscow blames that entirely on Saudi Arabia.

Oil prices began falling in June 2014 in large part because of increased production in North America and Russia, which created more supply than demand could consume. Yet five months into oil’s nosedive, at its ministerial meeting in Vienna, OPEC, led by Saudi Oil Minister Ali al-Naimi, decided not to cut production to shore up prices but to maintain its ceiling of 30 million barrels per day.

Al-Naimi said his aim was to keep prices low in a price war with drillers in the United States, who were relying on relatively expensive hydraulic fracturing to extract oil, and in Russia, who can’t help shore up the price of oil by limiting production because the climate in most of its oil country is so cold that stopping production at some wells would freeze them up.

At its latest meeting, on Dec. 4, OPEC effectively dispensed with its production ceiling altogether, putting more downward pressure on oil prices, and on Russia’s economy. And this has rankled Novak.

Related: China's $1 Trillion Nuclear Plan

“This year Saudi Arabia has ramped up production by 1.5 million barrels per day, which in fact destabilized the situation on the market,” the energy minister said Monday in an interview with the state-owned broadcaster Rossiya 24.

Add to this, Novak said, is Iran’s return to the market, probably in early 2016, once the West lifts sanctions it imposed because of Tehran’s nuclear program. Throughout much of 2015 Iran has been urging OPEC, without success, to make room for its return to the market.

Still, there is some hope that oil prices will stabilize sometime in 2016. In its annual World Oil Outlook, issued Dec. 23, OPEC said it expected “a gradual improvement in market conditions as growing demand and slower than previously expected non-OPEC supply growth eliminate the existing oversupply and lead to a more balanced market.”

Related: OPEC: $95 Oil, But Not Until 2040

Novak, possibly referring to the OPEC forecast, also expressed optimism, saying, “According to experts’ estimates, demand-and-supply curves may coincide in the second half of 2016, which will balance the market.”

Arkady Dvorkovich, Russia’s deputy prime minister, agreed, saying low prices eventually could become the agent of their stabilization. “For some time, any company, any producing country is able to sustain such low prices,” he told Rossiya 24. “But then investment will inevitably go down, which means that production will fall and prices will rise.”

http://oilprice.com/Energy/Oil-Prices/Oil-Crash-Shrinks-Russian-GDP-Energy-Minister-Blames-Saudis.html

Because Russia’s government relies on oil production for half its revenues

AlfaT8 wrote:Ok, now i cant tell you how many times this one has come up.

Because Russia’s government relies on oil production for half its revenues

How substantial is this claim?

AlfaT8 wrote:Ok, now i cant tell you how many times this one has come up.

Because Russia’s government relies on oil production for half its revenues

How substantial is this claim?

Jon Hellevig
Share of oil and gas in Russia’s tax revenue dropped to 21%, but the threatened devastation failed to materialize

27.03.2016

We were being hammered with the message that Russia is nothing more “than a gas station masquerading as a country”. Russia’s economy was supposed to “be in tatters” once the oil revenue drained, for supposedly Russia produced nothing else.

Well, now their dream of low oil prices have come true, but somehow it failed to materialize in the annihilation of Russia’s economy. The industry is intact, showing a slight growth of 1% for the two months of this year and having reported only a negligible decline of 3.4% for all of 2015. Unemployment has persistently stayed at levels of 5.8%. The trade balance for the year was a whopping 46% of exports leaving $160 billion in Russia’s coffers. The imports are at historically low levels because Russia’s diversified economy now produces domestically most of what it consumes, as I reported earlier. The gold and currency reserves stand at 370 billion at the most recent bean count.

Last week more cold water was poured on the Russia bashers as it was reported that the share of oil and gas in the country’s tax revenues had fallen to only 21% as per the situation at end of February. This is a far cry from the 50% that Western “experts” habitually claim that oil and gas account for. Once more, this shows that Russia has a sufficiently diversified economy and other sources of income when oil is down. Hereby Russia runs a quite acceptable, by Western standards, budget deficit, which is expected to be 3.8% of the GDP (consolidated budget), down from 4.6% in the previous year.