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    Russian Economy General News: #7

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    Austin

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    Post  Austin on Wed Feb 15, 2017 5:11 am

    Finance Ministry has said they will purchase Forex from the market and will put in NWF.

    I dont think the FM/CB would let Ruble average out more than what they forecasted for the year
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    Post  Project Canada on Wed Feb 15, 2017 8:47 am

    Russia may allocate $6.5 mln to promote ‘Made in Russia’ brand


    Creating the "Made in Russia" export brand will allow to increase the possibility of promoting Russian-made products at international markets, according to the Russian Ministry of Industry and trade




    MOSCOW, February 15. /TASS/. The Russian Ministry of Industry and Trade suggested allocatinbg 370 million rubles (about $6.5 million at the current exchange rate) for promoting the "Made in Russia" brand at foreign markets.
    The money will be allocated to the Russian Export Center, a state export support institution.


    "Creating the "Made in Russia" export brand will allow to increase brand awareness of Russian-made products, increase the possibility of promoting it at international markets and form brand loyalty for Russian products among foreign buyers," reads a draft plan, posted on Russia’s official legal information portal Tuesday.
    Under the plan, an information campaign to promote the brand will be carried online and via Russia’s English-language Russia Today channel, as well as through numerous exhibitions and competitions. The plan also envisages various marketing studies.

    The Russian Export Center was established in 2015 as a one-stop-shop for exporters, providing financial and non-financial support, and interacting with relevant ministries and agencies. Its areas of expertise include export transactions, providing consultations on issues related to exports, assistance in organising exports, and providing support related to export procedures.




    http://tass.com/economy/930922
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    Post  Austin on Sun Feb 19, 2017 7:03 pm

    Over the past 16 years, the total volume of construction works in Russia amounted to 60.2 trillion rubles

    http://sdelanounas.ru/blogs/90495/

    The construction industry of Russia for the last 16 years has performed works by 60.2 trillion rubles in current prices.
    In comparable prices by 1990 the volume of work in the period 2008-2016. It reaches about 82-87%.
    The volume of construction works:

    2000, 503 billion rubles. or 36.1% by 1990
    2005: 1.754 trillion rubles. or 57.7% by 1990
    2008: 4.528 trillion rubles, or 90.8% by 1990
    2013: 6.02 trillion rubles, or 89.3% by 1990
    2015: 6.148 trillion rubles, or 83.1% by 1990
    2016: 6.2 trillion rubles
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    Post  kvs on Sun Feb 19, 2017 11:04 pm

    Austin wrote:Over the past 16 years, the total volume of construction works in Russia amounted to 60.2 trillion rubles

    http://sdelanounas.ru/blogs/90495/

    The construction industry of Russia for the last 16 years has performed works by 60.2 trillion rubles in current prices.
    In comparable prices by 1990 the volume of work in the period 2008-2016. It reaches about 82-87%.
    The volume of construction works:

    2000, 503 billion rubles. or 36.1% by 1990
    2005: 1.754 trillion rubles. or 57.7% by 1990
    2008: 4.528 trillion rubles, or 90.8% by 1990
    2013: 6.02 trillion rubles, or 89.3% by 1990
    2015: 6.148 trillion rubles, or 83.1% by 1990
    2016: 6.2 trillion rubles

    Very interesting data. So construction did not seriously slow down after 2014 and the 2015 recession. It did not
    speed up its pace, but shows a solid base which is driven by essential demand instead of speculation. There is
    still a lot of room for re-development in Russia and new construction such as we had around Sochi to fill in the
    development gaps left behind by the USSR.
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    Post  Rmf on Mon Feb 20, 2017 12:56 am

    Austin wrote:Japan has domestic debt level of 250 % of GDP and they are doing fine , they havent collapsed

    Having a project 15.7 % of state GDP to Debt ratio by 2019 is penuts , My own country India has public GDP to Debt ratio of around 50 % if you add the state debt it adds to around 67 %
    yes but they havent grown for over 20 yrs, they have zombie economy , if you go to japan its like you back in time to late 80s. and they are slowly losing the edge in many industries.
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    Post  A Different Voice on Wed Feb 22, 2017 12:36 am

    Rmf wrote:
    Austin wrote:Japan has domestic debt level of 250 % of GDP and they are doing fine , they havent collapsed

    Having a project 15.7 % of state GDP to Debt ratio by 2019 is penuts , My own country India has public GDP to Debt ratio of around 50 % if you add the state debt it adds to around 67 %
    yes but they havent grown for over 20 yrs, they have zombie economy , if you go to japan its like you back in time to late 80s. and they are slowly losing the edge in many industries.

    I believe Japan's annual GDP growth rate has been a little bit better than Russia's since the big dip in 2009.  Obviously, this one data point comparing the 2 countries' economic performance does not give us the while story. However it is good to keep that data in mind.

    Paper money has no real value. Looking at currency valuations in the big picture, a country's currency is a function of people's perceptions/confidence in its value now and in the future.  As such currency has value because people believe it has value and will continue to have value.  Japan can borrow in the manner it does because people "perceive" little repayment risk. Japan can borrow easily in yen because people "perceive" little currency valuation risk both.  In the future such perceptions may change for a variety of reasons.  If they do, then Japan will be in real trouble.  Japan's debt levels make me nervous.

    Russia's debt situation is good. Part of that is due to impressive fiscal discipline. Part of that is due to limitations on its ability to borrow.  Part of that is due to its tremendous natural resources.  Because of the Ruble's short and eventful history, it may take a while before it is "trusted."  Russia is taking important steps to create this trust.
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    Post  max steel on Sun Feb 26, 2017 11:18 pm

    Crimea's revenues have doubled within three years since reunification with Russia


    Totally unsurprisingly, given that the Kremlin has been heavily subsidising the peninsula out of its federal coffers.
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    Post  GarryB on Mon Feb 27, 2017 1:19 am

    It does not matter whether Russia is funding this or not.

    The simple fact is that the Ukraine and the west are in no position to offer anything better so they are clearly better off as part of Russia.

    The Ukrainian economy could also be given an enormous boost simply by restoring trade ties with Russia... the wonderful thing is that they are too stubborn to do it and so continue to suffer... hahahahaha.
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    Post  kvs on Mon Feb 27, 2017 2:49 am

    max steel wrote:Crimea's revenues have doubled within three years since reunification with Russia


    Totally unsurprisingly, given that the Kremlin has been heavily subsidising the peninsula out of its federal coffers.

    You make it sound like its economy is totally subsidized. BS. If Canada could transfer tax money to Quebec and the maritime
    provinces from the rest of the country, then so can Russia. I don't recall anyone bitching about this. These are actually
    investments and not subsidies since the funding transfer decreases as the local economy grows and develops its tax base.
    Clearly this is happening in Crimea as the revenues figures prove.

    It is the schizophrenic EU where real union financing as in Canada and the USA cannot occur and hence we see Greece being
    flushed down the toilet. NATO and other idiots can only wish that Russia would adopt such a retarded policy.
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    Post  Kimppis on Mon Feb 27, 2017 10:10 pm

    Russian economy to grow 2% this year – economic development minister

    https://www.rt.com/business/378756-russia-economy-growth-oreshkin/

    And I'll repeat this again, if some of you missed it: GDP figures for the last few years were updated a while ago and they are more positive than the earlier ones. So a decline of 2.8% (not 3.7%) for 2015 and 0.2% for 2016 (vs. 0.6, IIRC). Considering that the economy actually grew by 0.6% in 2014, it means that there was only a modest GDP decline of around 2.5% for the period overall. Wow, a collapse is indeed imminent.
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    Post  Austin on Tue Feb 28, 2017 6:14 pm

    kvs and others read the interview in full its interesting

    Boris Titov: implementation of the "Growth Strategy" will allow Russia by 2035 to double the GDP


    http://www.interfax.ru/interview/550606

    Business Ombudsman spoke about the essence of the documents and the discrepancy with the proposals of the Center for Strategic Research

    - The main targets of the program?

    - The essence of the strategy is that in the present circumstances only the market, private business, competition could save the Russian economy.

    The main indicator - GDP growth. We believe that in 2019 the growth should be 3.5 - 5%. Growth of 4-6% should remain until 2025. Then he may decline slightly by 2035 to 3-3.5%.

    The consistent increase in the rate of growth and improvement of its quality will double the GDP by 2035.

    The first stage of "Growth Strategy," (2017 - 2019 gg) we conventionally call "New Industrialization", whose mission - to restore economic growth. We must reach 30 thousand. Dollars of GDP per capita at purchasing power parity (PPP).

    The second stage - "Innovative Economy" (2020- 2025 years), involves access to high speed and quality of economic growth and should provide 40 thousand dollars per capita at PPP.

    The third stage - "Knowledge Economy" (2026 - 2035 years) involves ensuring sustainable development of the country with access to 45 thousand dollars per capita at PPP..

    We believe that each of these stages has its own economic characteristics.

    The first stage - is the use of domestic demand as the main driver of growth - import substitution and the use of traditional exports. There should be moderately low exchange rate of the ruble. That is, we have to support import substitution, to stimulate domestic producers. Thus the development should be provided primarily existing competitive dozagruzkoy capacity. Today we have about 25% are not employed capacity.

    At the second stage the economy should grow by increasing productivity, investment, expansion of non-oil exports. At this stage it will be the strengthening of the ruble exchange rate in line with economic growth, regardless of the prices of raw materials. Development should ensure that increasing investment in fixed assets and human capital. This can be called the period of entering the high growth rates.

    The third stage - a sustainable development, which should ensure a balanced mix of developing the internal market by improving the quality characteristics of the standard of living and dynamic development of non-commodity high-tech exports, opening new markets innovative products and services. At this stage, it will increase the share of Russia in the world economy through the development of innovative global markets and managing global production chains.

    It is proposed to ensure the normal functioning of the economy in terms of nominal convergence rate parameters and PPP. That is, if it is in dollars have a hamburger costs three times cheaper than in New York, then in the normal functioning of the economy and the cost in dollars and in rubles should be almost the same. Now this is not because there is a big difference between the nominal rate and the rate at purchasing power parity.
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    Post  kvs on Wed Mar 01, 2017 1:14 am

    All three stages are developing concurrently already. The key thing to remember is that Russia has a free economy and command
    economic measures are more like window dressing. The fallout from 2014 is accidental and not planned. Russia should take advantage
    of this moment to rebuild its industries and it is doing this to a reasonable extent. Domestic demand will always be the prime GDP driver.
    Somehow insinuating that this will change in the future smells of banana republic. Even China does not depend on its massive exports
    for its GDP growth and it is domestic demand that drives it.

    Since Russia cannot bank on being a sweatshop like China, it needs a forex policy which suppresses the value of the ruble. It will
    always be cheaper to move manufacturing to China or elsewhere which is less developed. But this offshoring is a type of long term
    economic suicide. If these people want Russia's GDP to double by 2035 they need to prevent offshoring. I don't buy all the
    efficiency gain crap. The economics metrics used to measure "efficiency" are unphysical. There would be a large boost in
    efficiency if every worker was fired and replaced by robots. But robots don't buy products. So this approach is clear nonsense.
    Right-sizing and down-sizing are all nonsense marketing-driven, trickle down management spawned delusion that has no place
    in a long term economics development program.

    We are seeing the offshoring, economics opportunism chickens coming home to roost in the USA. Don't buy for a second how rich
    Americans are. Some of them are rich. Many more of them are poor and quickly getting poorer. Trump is a manifestation of this
    crisis. The rabid corporate whore "left" is in total denial.
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    Post  Austin on Wed Mar 01, 2017 9:52 am

    Sochi forum yields deals worth over $3 billion — deputy PM

    More:
    http://tass.com/economy/933353

    "For the first time we are holding the forum in wintertime. It has been only six months since the previous one was held, but, nevertheless, evidence shows that this decision was justified. The number of participants was up 8% [compared to the previous forum]. Early estimates of the value (of the deals concluded) put the figure at 200 billion rubles, but those are intermediate results," Kozak said.

    He described the forum as a success, with about 600 companies taking part, including 80 from abroad.

    "There is great interest toward the forum," he said.

    The Russian Investment Forum in Sochi opened on Monday and concluded Tuesday. The forum’s program focused on three themes: "New regional policy - opportunities for development; improving business performance; and successfully achieving projects in life."

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    Post  Austin on Wed Mar 01, 2017 9:54 am

    Russian government to continue with privatization of state assets — premier

    More:
    http://tass.com/economy/933317

    "Privatization will take its course. It is not connected with the sanctions, it depends on market conditions: we will have to sell what is profitable to sell," Medvedev said.


    The Prime Minister said that privatization as such is not the purpose for the government.

    "Privatization is a tool, it is not some special goal that we pursue. It is a tool to replenish the budget, as it was done in the case of the sale of shares of Rosneft and Alrosa, or to find a more effective owner, when we believe that the participation of a private investor will bring the best results," the head of the government said.

    More:
    http://tass.com/economy/933317
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    Post  Austin on Wed Mar 01, 2017 9:55 am

    Medvedev believes West’s anti-Russian sanctions are to stay for long

    More:

    http://tass.com/politics/933314

    "I have spoken about the sanctions more than once: we should be prepared to live under sanctions indefinitely long,"
    he said in an interview with the Rossiya-1 television channel.

    "Just look at what our friends overseas and in Europe are doing! They are enshrining these sanctions in law, they are codifying them. They are initiative a great deal of laws on top of various executive orders [U.S. former President Barack] Obama has issued. They are trying to pass laws to formalize these sanctions as standing, like the Jackson-Vanik amendment," he said.


    So, in his words, the sanctions are very much unlikely to be lifted soon. "In this sense, we cannot count on their indulgence," he said. "And we don’t need it because, as life has shown, we can develop rather well even in conditions of the sanctions. And what we have achieved in industry and in agriculture was achieved not thanks to but despite as we had to restructure our work."

    More:
    http://tass.com/politics/933314
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    Post  Austin on Wed Mar 01, 2017 6:14 pm

    Sergei Glazyev provides seven scenarios for Russia

    https://www.gazeta.ru/business/2017/02/25/10543481.shtml
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    Post  Kimppis on Wed Mar 01, 2017 8:11 pm

    Austin wrote:kvs and others read the interview in full its interesting

    Boris Titov: implementation of the "Growth Strategy" will allow Russia by 2035 to double the GDP


    http://www.interfax.ru/interview/550606

    Business Ombudsman spoke about the essence of the documents and the discrepancy with the proposals of the Center for Strategic Research

    - The main targets of the program?

    - The essence of the strategy is that in the present circumstances only the market, private business, competition could save the Russian economy.

    The main indicator - GDP growth. We believe that in 2019 the growth should be 3.5 - 5%. Growth of 4-6% should remain until 2025. Then he may decline slightly by 2035 to 3-3.5%.

    The consistent increase in the rate of growth and improvement of its quality will double the GDP by 2035.

    The first stage of "Growth Strategy," (2017 - 2019 gg) we conventionally call "New Industrialization", whose mission - to restore economic growth. We must reach 30 thousand. Dollars of GDP per capita at purchasing power parity (PPP).

    The second stage - "Innovative Economy" (2020- 2025 years), involves access to high speed and quality of economic growth and should provide 40 thousand dollars per capita at PPP.

    The third stage - "Knowledge Economy" (2026 - 2035 years) involves ensuring sustainable development of the country with access to 45 thousand dollars per capita at PPP..

    We believe that each of these stages has its own economic characteristics.

    The first stage - is the use of domestic demand as the main driver of growth - import substitution and the use of traditional exports. There should be moderately low exchange rate of the ruble. That is, we have to support import substitution, to stimulate domestic producers. Thus the development should be provided primarily existing competitive dozagruzkoy capacity. Today we have about 25% are not employed capacity.

    At the second stage the economy should grow by increasing productivity, investment, expansion of non-oil exports. At this stage it will be the strengthening of the ruble exchange rate in line with economic growth, regardless of the prices of raw materials. Development should ensure that increasing investment in fixed assets and human capital. This can be called the period of entering the high growth rates.

    The third stage - a sustainable development, which should ensure a balanced mix of developing the internal market by improving the quality characteristics of the standard of living and dynamic development of non-commodity high-tech exports, opening new markets innovative products and services. At this stage, it will increase the share of Russia in the world economy through the development of innovative global markets and managing global production chains.

    It is proposed to ensure the normal functioning of the economy in terms of nominal convergence rate parameters and PPP. That is, if it is in dollars have a hamburger costs three times cheaper than in New York, then in the normal functioning of the economy and the cost in dollars and in rubles should be almost the same. Now this is not because there is a big difference between the nominal rate and the rate at purchasing power parity.

    Very interesting, thanks for sharing.

    Those upper growth estimates are really ambitious, though. Not to mention kind of... unnecessary. Russian economy is already reasonably well developed, it's not the early 2000s anymore.

    You should compare Russia to Baltic countries, Poland, Hungary, Kazakhstan, Belarus and even Romania. Have they been growing anywhere close 5-6% lately? No?

    That would be pretty close to China's growth rate, ffs. And China is kind of an exceptional case to begin with (OK, with South Korea and Japan) and it's still quite a bit less developed than Russia (PPP GDP per capita 15K vs. Russia's 25K). I don't know... I feel 3.5-4% would be... enough.

    As kvs pointed out, the ridiculous Russophobic "Russia is a gas station" myth needs to be die (it won't). Energy exports are Russia's comparative advantage, it's really that simple. Exports are not the same as the overall economy.

    Oil and gas sectors are going to remain Russia's main exports and they should, period. Of course, their share should gradually decline, but the whole thing has been massively exaggerated.

    Russophobe haters should look at Australia's, Norway and Canada's export baskets. Some banana republics, huh? Australia, Canada and Russia - what do they have in common? Huge land masses + natural resources.
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    Post  Austin on Thu Mar 02, 2017 10:22 am

    Austin wrote:Sergei Glazyev provides seven scenarios for Russia

    https://www.gazeta.ru/business/2017/02/25/10543481.shtml

    I get the feeling that Russia should be careful in dealing with China , I think China and US has some back to back deal with each other and they pretend to be against each other on face but economically and to maintain the current set up lead by US/West and IMF china plays a major role in returning to getting a free hand.

    If one watched US media carefully they would never critize China but even Sessions speaking with Russian Ambassador is a Crime and carried by All US MSM today.

    Shows how powerful China is in the US system
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    Post  miketheterrible on Thu Mar 02, 2017 11:20 am

    Russia doesn't trust anyone. But reason for US being cautious in over criticising China is Chinas investments and ownership in US companies and US debt China owns. So they aren't buddy buddy but they will want to keep status quo until China finds an alternative to US for all its economy. And it sees Russia as part of that. China won't throw Russia around or treat it poorly because it can't. Russia has plenty of others to operate with and hence why it isn't in a hurry to do anything.
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    Post  Kimppis on Fri Mar 03, 2017 8:15 pm

    Inflation in Russia already close to 4% target — minister

    More:
    http://tass.com/economy/933940



    Inflation slowdown above forecast to keep potential for key rate reduction — Central Bank

    More:
    http://tass.com/economy/933950
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    Post  Singular_Transform on Fri Mar 03, 2017 11:04 pm

    miketheterrible wrote:Russia doesn't trust anyone. But reason for US being cautious in over criticising China is Chinas investments and ownership in US companies and US debt China owns. So they aren't buddy buddy but they will want to keep status quo until China finds an alternative to US for all its economy. And it sees Russia as part of that. China won't throw Russia around or treat it poorly because it can't. Russia has plenty of others to operate with and hence why it isn't in a hurry to do anything.

    The US doesn't has alternative.


    It has lot of consumers, and its willing to sacrifice its producers to maintain an empire.

    China can be like that.

    All that its need a few simple things:
    -liquidate the whole SOE sector
    =increase the wages twofold in real value
    -the GDP increase has to go to the consumers

    Simple, isn't it?


    All that it takes is to transfer the power from the goverment officials and oligarch to the average chinese.
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    Post  kvs on Sat Mar 04, 2017 2:21 am

    Kimppis wrote:Inflation in Russia already close to 4% target — minister

    More:
    http://tass.com/economy/933940



    Inflation slowdown above forecast to keep potential for key rate reduction — Central Bank

    More:
    http://tass.com/economy/933950


    This is actually not good news. The draconian CBR prime rate is stalling the Russian economy to the point that normal inflation rate
    which is round 6% is being suppressed. This is not a strength this is a weakness. As soon as the lending rates become reasonable
    there will be a sharp increase in inflation. So the monterist scumbags at the CBR are actually destabilizing the financial-inflation situation
    in Russia.

    I am being convinced that Putin's legacy failure will have been to coddle the scum at the CBR. As I pointed out in another post, when
    the inflation was over 13% the CBR rate was 10% around 2010. The current CBR regime's policy of having a rate of 10.5% when inflation
    is under 6% is pure economic sabotage. The rate should have been 4% when the inflation rate hit 6%. Inflation is one of those things
    that requires long term adjustment/adaptation and not nutjob instant gratification "policy". If you look in the history going back to the
    late 1800s, inflation has always been a challenge. Be it the Fed or the CBR, no central bank rate can fix inflation problems. They require
    changes in the behaviour of economic actors (for example for resellers not to gouge as if there is no tomorrow).
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    Post  Austin on Sat Mar 04, 2017 7:05 am

    Inflation is getting controlled artifically by following a conservative economic policy and keeping interest rates high at 10 %.

    They probably want to get their inflation rate right before they target interest rate , which I dont think so will go down 50 basis point or 0.5 % as and when CBR thinks it should go , It will be a slow slide for sure with 0.5 % as basis for slide.

    This is really bad for business class who cant afford loan from Bank at such high interest rates and them getting loan from abroad is blocked due to sanctions.  This hurts the production sector of economy badly and does no good to it.

    CBR is following likely Putin & Co mandate to keep inflation down and keep savers class happy with high interest rate as they will earn more by Saving for an Election Year this works well with the voter screw the business class for now

    I think the business class will see better interest rate post elections certainly better than the 10 % post 2018 election , how much better time will tell but it will be a slow glide to low interest rate not a hard landing , CBR is superconservative on these matters.

    This year in 2017 I am expecting interest rate to go 0.5 % and if lucky 1 % which I doubt , I would bet on 9.5 % by EOY.

    A good interest rate is 4-5 % that takes care of need of savers and business class  but to get to that figure we will have to way another 5-6 years.
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    Post  kvs on Sat Mar 04, 2017 3:15 pm

    Austin wrote:Inflation is getting controlled artifically by following a conservative economic policy and keeping interest rates high at 10 %.

    They probably want to get their inflation rate right before they target interest rate , which I dont think so will go down 50 basis point or 0.5 % as and when CBR thinks it should go , It will be a slow slide for sure with 0.5 % as basis for slide.

    This is really bad for business class who cant afford loan from Bank at such high interest rates and them getting loan from abroad is blocked due to sanctions.  This hurts the production sector of economy badly and does no good to it.

    CBR is following likely Putin & Co mandate to keep inflation down and keep savers class happy with high interest rate as they will earn more by Saving for an Election Year this works well with the voter screw the business class for now

    I think the business class will see better interest rate post elections certainly better than the 10 % post 2018 election , how much better time will tell but it will be a slow glide to low interest rate not a hard landing , CBR is superconservative on these matters.

    This year in 2017 I am expecting interest rate to go 0.5 % and if lucky 1 % which I doubt , I would bet on 9.5 % by EOY.

    A good interest rate is 4-5 % that takes care of need of savers and business class  but to get to that figure we will have to way another 5-6 years.

    The Shadow Stats webpage does a good job demonstrating that the actual US consumer inflation rate over most of the last 30 years has been 6%
    and not the faked up 2% (e.g. hedonics adjustments). The inflation methodology used in Russia is closer that used in the USA during the 1980s before
    Clinton's manipulated approach took over. So 6% was normal already and for Russia simply spectacular since it still has so many price and structural
    adjustments in progress (by comparison the USA is steady state).

    There is little value from savers getting "high" deposit rates if companies can't finance their operations. It used to be that banks converted savings
    into lending. Here we have a constriction on lending regardless of savings.
    avatar
    Austin

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    Russian Economy General News: #7 - Page 17 Empty Re: Russian Economy General News: #7

    Post  Austin on Sat Mar 04, 2017 5:54 pm

    kvs wrote:
    Austin wrote:Inflation is getting controlled artifically by following a conservative economic policy and keeping interest rates high at 10 %.

    They probably want to get their inflation rate right before they target interest rate , which I dont think so will go down 50 basis point or 0.5 % as and when CBR thinks it should go , It will be a slow slide for sure with 0.5 % as basis for slide.

    This is really bad for business class who cant afford loan from Bank at such high interest rates and them getting loan from abroad is blocked due to sanctions.  This hurts the production sector of economy badly and does no good to it.

    CBR is following likely Putin & Co mandate to keep inflation down and keep savers class happy with high interest rate as they will earn more by Saving for an Election Year this works well with the voter screw the business class for now

    I think the business class will see better interest rate post elections certainly better than the 10 % post 2018 election , how much better time will tell but it will be a slow glide to low interest rate not a hard landing , CBR is superconservative on these matters.

    This year in 2017 I am expecting interest rate to go 0.5 % and if lucky 1 % which I doubt , I would bet on 9.5 % by EOY.

    A good interest rate is 4-5 % that takes care of need of savers and business class  but to get to that figure we will have to way another 5-6 years.

    The Shadow Stats webpage does a good job demonstrating that the actual US consumer inflation rate over most of the last 30 years has been 6%
    and not the faked up 2% (e.g. hedonics adjustments).   The inflation methodology used in Russia is closer that used in the USA during the 1980s before
    Clinton's manipulated approach took over.   So 6% was normal already and for Russia simply spectacular since it still has so many price and structural
    adjustments in progress (by comparison the USA is steady state).  

    There is little value from savers getting "high" deposit rates if companies can't finance their operations.   It used to be that banks converted savings
    into lending.  Here we have a constriction on lending regardless of savings.

    Inflation is affecting the US in unknown ways , Some one was telling me the size of the product is now going smaller in a smart way without changing the box cover.

    Putin is also a politician , If Life was only about Economy , I think Putin would have told CBR to reduce rates to what business wants or go fly a kite ....That pretty much applies any where.

    I think the current thinking in top of any politican mind in election year is to keep price of commodity stable , keeping inflation as low as possible is one way to achieve it .....If he wins the election if he stands for it , this would be his last term and he can take more business friendly decision

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