Russian Economy General News: #5

Austin wrote:kvs , What is the downside of weakening Rouble versus USD incase of fall in Oil Price ?

Today Rouble is trading at 70 to 1 USD when Ural is trading at 36

http://www.bloomberg.com/quote/USDRUB:CUR
http://www.bloomberg.com/energy


Lets says CBR reduced interest rate to 9 or 10 % which weakens rouble further to says 75 or 80 to 1 USD.

But reducing is takes care of most of budget deficit , What is the downside of weakning rouble in light of the fact that CBR is now targeting interest rate and not rouble rate

The cost of a barrel of oil at $ 35 is not critical to Sberbank and the Russian banking system as a whole. This is the opinion predpravleniya Sberbank German Gref, "Interfax".

According to him, oil prices below $ 40 are additional challenges. "But in all cases we are considering, we including a variant of our stability, our economy, we expect the price of $ 35, and in all cases next year turns out not so critical," - he explained.

Gref said that Sberbank forecast can be projected on the entire banking system of Russia. According to him, 2016 will be difficult, "if prices stay at this level."

He also noted that if the low oil prices fall in the Russian economy may exceed expectations. "But some supercritical I honestly do not see it. I think it will be difficult for all public budgets, mainly the regional budgets, the debt will grow rapidly. I think that the federal deficit will be much larger than envisaged" - Gref said, adding that the low price of oil is necessary to think over the sources to cover the deficit or the sequestration of certain articles of the budget.

Russian President Vladimir Putin said next year’s budget based on oil at $50 a barrel is too optimistic, considering current prices. However, he has assured the country that the worst of the economic crisis is over.

“We are aware of the high dependence of our economy on the price of our traditional export products – oil, gas and their derivatives. We proceeded from the fact that the average price for Brent will be $100 per barrel,” said Putin during a news conference on Thursday.

“When the price dropped from $100 to $50 per barrel we planned the budget considering these figures. Now the price is $38. We are forced to revise again,” Putin said.

Putin said low oil prices have dragged down the Russian economy, but it’s slowly recovering and the worst of the crisis is behind.

“It is a 3.7 percent GDP contraction, 12.3 percent inflation. The real income of the population has fallen, the investment in fixed assets decreased by 5.7 percent. However, statistics show that the crisis in the Russian economy as a whole has passed its peak. From the second quarter, there are signs of stabilization in business activity. In September and October, GDP grew by 0.1-0.3 percent compared to the previous month,” he said.

The President also addressed concerns over using the country's reserves to fill the hole in the budget left by falling crude prices. In October, Russian Finance Minister Anton Siluanov said the nation’s Reserve Fund could be depleted in 2016, forcing the government to dip into its last remaining reserve, the National Welfare Fund.

“Our foreign reserves stand at $364.4 billion. They’ve depleted a bit, but it’s still a very solid figure,” said Putin.

According to Russian Economic Development Minister Aleksey Ulyukaev, $40 oil doesn’t threaten stability in the economy, but won’t allow GDP, production and consumer demand to turn positive next year.

In the adopted budget for 2016, the Kremlin was relying on $50 per barrel and 63.3 rubles per dollar.

sepheronx wrote:Aconitum: transshipment at sea ports of Russia for 11 months increased by 3% to 608.9 million tons

Movement through the ports is good, and glad to see it growing.

flamming_python wrote:

sepheronx wrote:Aconitum: transshipment at sea ports of Russia for 11 months increased by 3% to 608.9 million tons

Movement through the ports is good, and glad to see it growing.

Quite a pathetic increase to be frank, as are all such similar 'accomplishments' with low figures like this.

In the corporate world, if your business grows at 3% a year then it's stagnating, and dead sure to be overtaken soon by one that's growing 13%, or even 30%.

And you can't make the excuse of having a high base - Russia's transit figures are small compared to the world giants in this sector, whose corresponding growth figures were much higher when they were at Russia's current position. As a proportion of its total seaport transit potential, Russia is severely under-performing here.

Some people of course persist in telling us that the Russian economy is mighty and invincible, and only compares unfavourably because its economic figures are being under-cooked by world ranking agencies and financial instruments.

sepheronx wrote:

flamming_python wrote:

sepheronx wrote:Aconitum: transshipment at sea ports of Russia for 11 months increased by 3% to 608.9 million tons

Movement through the ports is good, and glad to see it growing.

Quite a pathetic increase to be frank, as are all such similar 'accomplishments' with low figures like this.

In the corporate world, if your business grows at 3% a year then it's stagnating, and dead sure to be overtaken soon by one that's growing 13%, or even 30%.

And you can't make the excuse of having a high base - Russia's transit figures are small compared to the world giants in this sector, whose corresponding growth figures were much higher when they were at Russia's current position. As a proportion of its total seaport transit potential, Russia is severely under-performing here.

Some people of course persist in telling us that the Russian economy is mighty and invincible, and only compares unfavourably because its economic figures are being under-cooked by world ranking agencies and financial instruments.

Well, it is a good thing you know math, and an increase is an increase.  If you like it or not.  As well, read what grew and what fell in shipments.

So, which ones growing at those rates your saying at same total weight?

Only you can take a growth and call it bad and things are falling.  Chin up. Accept growth for what it is.

Neutrality wrote:Sometimes 3% is alot more than 20%. The important part here is the base number. 3% of 500 million is alot more than 20% of 5 million.

Militarov wrote:Russia was never major sea trade route... what does it connect? Polar bears and camels in Iran? Russia is important road between East and West when Euroasia in mind, other than that all major sea routes are not near Russia except northen route but no need to stop in Russian ports at all for that.

No Bosfor, Gibraltar, Suez, no wast warm water ports...no key sea route is connected with Russia. However they are connected with Turkey, Greece, Singapore, China, Japan...Panama...

magnumcromagnon wrote:

Militarov wrote:Russia was never major sea trade route... what does it connect? Polar bears and camels in Iran? Russia is important road between East and West when Euroasia in mind, other than that all major sea routes are not near Russia except northen route but no need to stop in Russian ports at all for that.

No Bosfor, Gibraltar, Suez, no wast warm water ports...no key sea route is connected with Russia. However they are connected with Turkey, Greece, Singapore, China, Japan...Panama...

A high concentration of fast rail/maglev networks freight capacity/efficiency should vastly surpass anything a warm water port could provide.

magnumcromagnon wrote:

Militarov wrote:Russia was never major sea trade route... what does it connect? Polar bears and camels in Iran? Russia is important road between East and West when Euroasia in mind, other than that all major sea routes are not near Russia except northen route but no need to stop in Russian ports at all for that.

No Bosfor, Gibraltar, Suez, no wast warm water ports...no key sea route is connected with Russia. However they are connected with Turkey, Greece, Singapore, China, Japan...Panama...

A high concentration of fast rail/maglev networks freight capacity/efficiency should vastly surpass anything a warm water port could provide.