Russian Economy General News: #5

The People’s Bank of China (PBC) has officially authorized the Russian ruble to be used alongside the yuan in the north-eastern city of Suifenhe City on the China-Russia border.

Altai motor plant on the program of import substitution continues to adapt its diesel engines for installation on tractors, harvesters and other machinery. The engines have already been successfully put to the tractors "Kirovets", tested the harvesters "Altai-Palesse" with the Altai engines.
The Altai territory industry and energy notes that the constructors of Altai motor plant will adapt the engine for tractor "Agromash-Ruslan", which has no analogues in Russia. It features a contemporary design, high energy saturation, a high level of working and transport speeds, maneuverability and easy operation. A triangular caterpillar contour provides optimum centre of gravity and allows you to work with heavy attachments and towed agricultural implements without additional ballast weights. And allows the tractor to go on the field for six to eight days earlier in the spring under conditions of high soil moisture and in two or three weeks later in the autumn in comparison with wheeled tractors.

August 7, opened a cheese factory in the village of Dubrova of the Istra district of Moscow region. In the dairy plan to do Russian and Parmesan cheese.
According to the owner of the dairy farmer Oleg Orphans, all the equipment was made by Russian manufacturer at the Moscow plant "Misconnect".

PapaDragon wrote:
In the meantime sdelanounas.ru is so loaded with pictures of cows, it looks like Playboy for bulls.  

''European Dairy Industry in Crisis Due to Russian Food Embargo

European dairy farmers are facing their most serious economic crisis in decades, largely as a result of the ongoing sanctions war between EU member countries and Russia.''

http://sputniknews.com/business/20150810/1025581375.html

At this rate we will need cow emoticon pretty soon...

Neutrality wrote:I'll tell you how this will end:

1) Massive amounts of jobs lost
2) State treasury loses tax income
3) Social welfare funds, which are already under heavy pressure, will be pressured once more due to people being laid off
4) Increase in prices

One of the most respected newspapers already reports that potatoe price might increase 3 times.

Moscow did its job once again. Someone out there analyzed the European agriculture business and its situation very thoroughly and chose the most effective response.

Neutrality wrote:No matter how you sugarcoat it, someone is going to get hit hard due to the embargo. I'm betting Spain and Portugal will be demanding some kind of support from France, Germany and UK in order to survive.

KoTeMoRe wrote:

Neutrality wrote:No matter how you sugarcoat it, someone is going to get hit hard due to the embargo. I'm betting Spain and Portugal will be demanding some kind of support from France, Germany and UK in order to survive.

Sugarcoat what?

Neutrality wrote:No matter how you sugarcoat it, someone is going to get hit hard due to the embargo. I'm betting Spain and Portugal will be demanding some kind of support from France, Germany and UK in order to survive.

medo wrote:

Neutrality wrote:No matter how you sugarcoat it, someone is going to get hit hard due to the embargo. I'm betting Spain and Portugal will be demanding some kind of support from France, Germany and UK in order to survive.

The main problem from Russian embargo will come to EU in the future. It is not only, that Russia stop imports from EU and that EU farmers and food industry lost their share in Russian market, but bigger problem will be in fact, that Russia invest a lot in agronomy and food production, not only to cover 100% domestic needs, but also for exports. Russia is already one of the biggest food exporters, but not in everything. In few years Russia will export everything, grain, meet, milk, vegetables, fruits and food products. When comparing to EU, Russia have lower taxes, low debt to pay and all needed energy and resources at home, so nothing to import, what mean that in international market Russian food and food products will be far cheaper than from EU and with the same quality, not to say, that Russia already forbid the use of GMOs. EU will soon face extremely powerful concurent in food and industrial products as they will not be able to produce with such low price because of high taxes, high debts and importing of energy and resources.

Russia’s economy shrank the most since 2009 after a currency crisis jolted consumer demand, while a selloff in oil threatens to drag the country into a deeper recession.

Gross domestic product contracted 4.6 percent in the second quarter from a year earlier after a 2.2 percent decline in the previous three months, the Federal Statistics Service in Moscow said on Monday, citing preliminary data. That was worse than the median forecast for a 4.5 percent slump in a Bloomberg survey of 18 analysts. The Economy Ministry had projected that output shrank 4.4 percent in the period, calling it “the lowest point” for Russia.



The rout on commodities markets has overshadowed the first signs of stabilization in Russia by hammering the ruble and shaking a country that relies on oil and gas for about half of its budget revenue. The world’s biggest energy exporter is enduring its first recession in six years after the nation’s biggest currency crisis since 1998 and a surge in inflation eroded consumer buying power as sanctions over Ukraine choked access to capital markets.


“While second-quarter growth surprised on the downside, perhaps far more importantly is the fact that the outlook for the Russian economy has deteriorated so far in the third quarter,” Piotr Matys, a London-based foreign-exchange strategist at Rabobank, said by e-mail. “The central bank may have to pause the monetary policy easing cycle at a time when local banks are still cut off from external sources of funding.”

Forward-rate agreements are signaling 23 basis points of increases in borrowing costs during the next three months. The Bank of Russia has lowered its key interest rate by a cumulative six percentage points to 11 percent in five steps this year.

Rate Pause?

A renewed slide in commodity prices may put the central bank in a bind if it destabilizes the ruble and reignites inflation. Consumer prices rose 15.6 percent in July from a year ago, down from a 13-year high of 16.9 percent in March. The central bank forecasts inflation at 10.8 percent by year-end and says its 4 percent target will be reached in 2017.

Urals, Russia’s export blend of crude, averaged $57 in the first half, down almost 47 percent from the same period a year earlier, according to the Economy Ministry. The ruble has depreciated more than 43 percent against the dollar in the past 12 months, the worst performance globally, according to data compiled by Bloomberg. It traded little changed at 63.97 versus the dollar as of 5:17 p.m. in Moscow.

“Faltering oil prices have increased the risks for the expected economic improvement in the second half,” UralSib Capital analyst Alexey Devyatov said in a report before the data release. “Sharp swings in the ruble rate have hit consumer demand and capital investment.”

ExBeobachter1987 wrote:Explain this.

Russia’s economy shrank the most since 2009 after a currency crisis jolted consumer demand, while a selloff in oil threatens to drag the country into a deeper recession.

Gross domestic product contracted 4.6 percent in the second quarter from a year earlier after a 2.2 percent decline in the previous three months, the Federal Statistics Service in Moscow said on Monday, citing preliminary data. That was worse than the median forecast for a 4.5 percent slump in a Bloomberg survey of 18 analysts. The Economy Ministry had projected that output shrank 4.4 percent in the period, calling it “the lowest point” for Russia.



The rout on commodities markets has overshadowed the first signs of stabilization in Russia by hammering the ruble and shaking a country that relies on oil and gas for about half of its budget revenue. The world’s biggest energy exporter is enduring its first recession in six years after the nation’s biggest currency crisis since 1998 and a surge in inflation eroded consumer buying power as sanctions over Ukraine choked access to capital markets.


“While second-quarter growth surprised on the downside, perhaps far more importantly is the fact that the outlook for the Russian economy has deteriorated so far in the third quarter,” Piotr Matys, a London-based foreign-exchange strategist at Rabobank, said by e-mail. “The central bank may have to pause the monetary policy easing cycle at a time when local banks are still cut off from external sources of funding.”

Forward-rate agreements are signaling 23 basis points of increases in borrowing costs during the next three months. The Bank of Russia has lowered its key interest rate by a cumulative six percentage points to 11 percent in five steps this year.

Rate Pause?

A renewed slide in commodity prices may put the central bank in a bind if it destabilizes the ruble and reignites inflation. Consumer prices rose 15.6 percent in July from a year ago, down from a 13-year high of 16.9 percent in March. The central bank forecasts inflation at 10.8 percent by year-end and says its 4 percent target will be reached in 2017.

Urals, Russia’s export blend of crude, averaged $57 in the first half, down almost 47 percent from the same period a year earlier, according to the Economy Ministry. The ruble has depreciated more than 43 percent against the dollar in the past 12 months, the worst performance globally, according to data compiled by Bloomberg. It traded little changed at 63.97 versus the dollar as of 5:17 p.m. in Moscow.

“Faltering oil prices have increased the risks for the expected economic improvement in the second half,” UralSib Capital analyst Alexey Devyatov said in a report before the data release. “Sharp swings in the ruble rate have hit consumer demand and capital investment.”

JohninMK wrote:Just as in the rest of the world I suspect that Russia's figures are also 'optimised' for whatever their strategic objective is. I somehow doubt that the objective is to make things look good. Much better to let everyone think the sanctions etc are hurting bad. In many ways the weaker the rouble the better.

ExBeobachter1987 wrote:Explain this.

Russia’s economy shrank the most since 2009 after a currency crisis jolted consumer demand, while a selloff in oil threatens to drag the country into a deeper recession.

Gross domestic product contracted 4.6 percent in the second quarter from a year earlier after a 2.2 percent decline in the previous three months, the Federal Statistics Service in Moscow said on Monday, citing preliminary data. That was worse than the median forecast for a 4.5 percent slump in a Bloomberg survey of 18 analysts. The Economy Ministry had projected that output shrank 4.4 percent in the period, calling it “the lowest point” for Russia.



The rout on commodities markets has overshadowed the first signs of stabilization in Russia by hammering the ruble and shaking a country that relies on oil and gas for about half of its budget revenue. The world’s biggest energy exporter is enduring its first recession in six years after the nation’s biggest currency crisis since 1998 and a surge in inflation eroded consumer buying power as sanctions over Ukraine choked access to capital markets.


“While second-quarter growth surprised on the downside, perhaps far more importantly is the fact that the outlook for the Russian economy has deteriorated so far in the third quarter,” Piotr Matys, a London-based foreign-exchange strategist at Rabobank, said by e-mail. “The central bank may have to pause the monetary policy easing cycle at a time when local banks are still cut off from external sources of funding.”

Forward-rate agreements are signaling 23 basis points of increases in borrowing costs during the next three months. The Bank of Russia has lowered its key interest rate by a cumulative six percentage points to 11 percent in five steps this year.

Rate Pause?

A renewed slide in commodity prices may put the central bank in a bind if it destabilizes the ruble and reignites inflation. Consumer prices rose 15.6 percent in July from a year ago, down from a 13-year high of 16.9 percent in March. The central bank forecasts inflation at 10.8 percent by year-end and says its 4 percent target will be reached in 2017.

Urals, Russia’s export blend of crude, averaged $57 in the first half, down almost 47 percent from the same period a year earlier, according to the Economy Ministry. The ruble has depreciated more than 43 percent against the dollar in the past 12 months, the worst performance globally, according to data compiled by Bloomberg. It traded little changed at 63.97 versus the dollar as of 5:17 p.m. in Moscow.

“Faltering oil prices have increased the risks for the expected economic improvement in the second half,” UralSib Capital analyst Alexey Devyatov said in a report before the data release. “Sharp swings in the ruble rate have hit consumer demand and capital investment.”

PapaDragon wrote:
In the meantime sdelanounas.ru is so loaded with pictures of cows, it looks like Playboy for bulls.  

''European Dairy Industry in Crisis Due to Russian Food Embargo

European dairy farmers are facing their most serious economic crisis in decades, largely as a result of the ongoing sanctions war between EU member countries and Russia.''

http://sputniknews.com/business/20150810/1025581375.html

At this rate we will need cow emoticon pretty soon...

American Eagle wrote:Russian economy contracts by 4%
ft.com/cms/s/3/8e640b2e-3f71-11e5-b98b-87c7270955cf.html

American Eagle wrote:Russian economy contracts by 4%
ft.com/cms/s/3/8e640b2e-3f71-11e5-b98b-87c7270955cf.html