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    Russian Economy General News: #8

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    Post  Cyberspec on Thu Jan 18, 2018 7:38 am

    The article says it's money held in the IMF...and I doubt it's a large amount
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    Post  miketheterrible on Thu Jan 18, 2018 7:50 am

    Cyberspec wrote:The article says it's money held in the IMF...and I doubt it's a large amount

    It's rumored to be 1/3 of the amount. But most speculate it's less than 1/10 of it.

    But still.
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    Post  Austin on Thu Jan 18, 2018 2:33 pm



    The surplus of the foreign trade balance of Russia in 2017 increased by 28%

    Moscow. January 17. INTERFAX.RU - The positive balance of foreign trade in Russia in 2017 increased by 28%, to $ 115.8 billion compared to $ 90.3 billion in 2016, according to the assessment of the balance of payments published on the website of the Central Bank of Russia.

    The volume of exports in 2017 amounted to $ 353.7 billion, which is 26% more than in 2016 ($ 281.9 billion).

    The volume of imports grew by 24% in 2017, to $ 237.9 billion from $ 191.6 billion in 2016.

    In the published comments of the Central Bank to the assessment of the balance of payments of the Russian Federation for 2017 it is noted that against the backdrop of favorable price conjuncture in commodity markets, there was a noticeably higher growth in the value of exports of goods compared with imports.

    According to the updated base scenario of the Central Bank's forecast in December (at an oil price of $ 53 per barrel), the foreign trade surplus of the Russian Federation in 2017 is expected at $ 112 billion with exports of $ 349 billion and imports of $ 237 billion.

    http://www.interfax.ru/business/595839
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    Post  Singular_Transform on Thu Jan 18, 2018 4:53 pm

    Austin wrote:

    The surplus of the foreign trade balance of Russia in 2017 increased by 28%

    Moscow. January 17. INTERFAX.RU - The positive balance of foreign trade in Russia in 2017 increased by 28%, to $ 115.8 billion compared to $ 90.3 billion in 2016, according to the assessment of the balance of payments published on the website of the Central Bank of Russia.

    The volume of exports in 2017 amounted to $ 353.7 billion, which is 26% more than in 2016 ($ 281.9 billion).

    The volume of imports grew by 24% in 2017, to $ 237.9 billion from $ 191.6 billion in 2016.

    In the published comments of the Central Bank to the assessment of the balance of payments of the Russian Federation for 2017 it is noted that against the backdrop of favorable price conjuncture in commodity markets, there was a noticeably higher growth in the value of exports of goods compared with imports.

    According to the updated base scenario of the Central Bank's forecast in December (at an oil price of $ 53 per barrel), the foreign trade surplus of the Russian Federation in 2017 is expected at $ 112 billion with exports of $ 349 billion and imports of $ 237 billion.

    http://www.interfax.ru/business/595839

    Maybe its time to restrict the export of oil products / minerals from Russia.

    What is the point to run this magnitude of trade surplus?
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    Post  Austin on Fri Jan 19, 2018 6:19 am

    Gold The Once and Future Money with James Rickards

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    Post  Austin on Fri Jan 19, 2018 6:22 am

    Russians have accumulated almost 30 trillion rubles

    Citizens still trust their money to banks more

    https://iz.ru/697226/inna-grigoreva/rossiiane-nakopili-pochti-30-trln-rublei

    Over the past year, the ruble accumulation of Russians increased by almost 14%, which exceeds inflation by 5.5 times. According to Rosstat, the volume of savings reached a record amount of almost 30 trillion rubles. Most of the money the population keeps on bank deposits - almost 20 trillion rubles, the smaller - in securities and cash - about 10 trillion. The accumulation of citizens increased due to the growth of real wages and favorable rates on deposits.

    Russians at the beginning of December 2017 increased their savings to 29.5 trillion rubles. This is stated in the Rosstat data, which Izvestia got acquainted with. The growth was 13.9%, while last year's inflation was only 2.5%.

    Most of all, Russian citizens trust their money to banks. The volume of deposits amounted to 19.6 trillion rubles (excluding foreign currency deposits). In cash, Russians - 5 trillion rubles, and in securities - 4.7 trillion rubles.

    Despite the growth of savings, in the middle of last year, Russians gradually began to move away from the savings model of behavior, noted earlier in the Central Bank. This is evidenced by the data of Rosstat. If in the first half of 2017 the population postponed an average of 200 billion rubles a month, then in the second half the rate slowed and the average amount of savings amounted to 150 billion rubles a month.

    One of the reasons for the increase in the total savings of Russians is the increase in real wages. According to Rosstat, in January-November their level rose by 3.2%. The salary of social workers has increased most, the Economic Picture for January prepared by the Ministry of Economic Development emphasizes. Only in the first nine months of last year, their salaries increased by 10%.

    "Wage growth rates again updated the maximum since the beginning of the second quarter of 2016. According to preliminary estimates, the increase in real wages in November, as in October, was 5.4% year on year, "the document says.

    The growth of wages is facilitated by the situation in the labor market. In connection with the demographic crisis of the 1990s, the number of the able-bodied population is now declining in Russia. The deficit of qualified personnel is observed in many industries. Since the number of vacancies exceeds the demand for them, salaries are also increasing.

    Another reason for increasing the savings of Russians is the favorable deposit rates. They remain interesting for the population, even despite their decline following the key rate of the Central Bank. So says the head of the Macroeconomics and Finance of the Center for Macroeconomic Analysis and Short-Term Forecasting Dmitry Belousov.

    - The population is lured to banks by rates on deposits. Yes, they declined over the year, but still remained attractive. There is no outflow of deposits, - said Dmitry Belousov. - In addition, last year the regions massively carried out the May decrees of the President on raising salaries to the average in the region.

    Deposit rates in the top 10 banks declined from 8% at the beginning of the year to 7.4% in the second half of December, the Central Bank said.


    Director of the Center for Market Research at the Higher School of Economics, Georgy Ostapkovic, considers the growth of household savings as a positive factor for the economy.

    - When the accumulation increases for a rainy day, the economy develops. Money is mostly kept in banks, which then send them to lending to businesses. Business invests funds borrowed into its production, thereby increasing GDP, "explained Georgy Ostapkovic.

    Real wages will continue to increase further, according to the Ministry of Economic Development. Their growth in 2018 will be 3.9%, according to the agency's forecast. However, experts see this as a risk. If earnings grow at a faster pace than productivity growth, then it will create inflationary pressures. Labor productivity this year will increase by 2.2%, predicted in the Ministry of Economic Development.

    Russian Economy General News: #8 - Page 19 04-%D0%9D%D0%B0%D0%BA%D0%BE%D0%BF%D0%BB%D0%B5%D0%BD%D0%B8%D1%8F-2

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    Post  Austin on Fri Jan 19, 2018 6:26 am

    30 trillion rouble of deposit is ~ $500 billion USD.

    Likely the low inflation ( 2-3 % ) and attractive back deposit ( 7-8 % ) with the secure nature of these deposit that gurantees returns means FD are very attractive to Russians now.

    Hope these can use this money for development works in Russia and dont stay there and CB will end up paying high interest rate for years.
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    Post  par far on Fri Jan 19, 2018 8:01 pm

    Austin wrote:Russians have accumulated almost 30 trillion rubles

    Citizens still trust their money to banks more

    https://iz.ru/697226/inna-grigoreva/rossiiane-nakopili-pochti-30-trln-rublei

    Over the past year, the ruble accumulation of Russians increased by almost 14%, which exceeds inflation by 5.5 times. According to Rosstat, the volume of savings reached a record amount of almost 30 trillion rubles. Most of the money the population keeps on bank deposits - almost 20 trillion rubles, the smaller - in securities and cash - about 10 trillion. The accumulation of citizens increased due to the growth of real wages and favorable rates on deposits.

    Russians at the beginning of December 2017 increased their savings to 29.5 trillion rubles. This is stated in the Rosstat data, which Izvestia got acquainted with. The growth was 13.9%, while last year's inflation was only 2.5%.

    Most of all, Russian citizens trust their money to banks. The volume of deposits amounted to 19.6 trillion rubles (excluding foreign currency deposits). In cash, Russians - 5 trillion rubles, and in securities - 4.7 trillion rubles.

    Despite the growth of savings, in the middle of last year, Russians gradually began to move away from the savings model of behavior, noted earlier in the Central Bank. This is evidenced by the data of Rosstat. If in the first half of 2017 the population postponed an average of 200 billion rubles a month, then in the second half the rate slowed and the average amount of savings amounted to 150 billion rubles a month.

    One of the reasons for the increase in the total savings of Russians is the increase in real wages. According to Rosstat, in January-November their level rose by 3.2%. The salary of social workers has increased most, the Economic Picture for January prepared by the Ministry of Economic Development emphasizes. Only in the first nine months of last year, their salaries increased by 10%.

    "Wage growth rates again updated the maximum since the beginning of the second quarter of 2016. According to preliminary estimates, the increase in real wages in November, as in October, was 5.4% year on year, "the document says.

    The growth of wages is facilitated by the situation in the labor market. In connection with the demographic crisis of the 1990s, the number of the able-bodied population is now declining in Russia. The deficit of qualified personnel is observed in many industries. Since the number of vacancies exceeds the demand for them, salaries are also increasing.

    Another reason for increasing the savings of Russians is the favorable deposit rates. They remain interesting for the population, even despite their decline following the key rate of the Central Bank. So says the head of the Macroeconomics and Finance of the Center for Macroeconomic Analysis and Short-Term Forecasting Dmitry Belousov.

    - The population is lured to banks by rates on deposits. Yes, they declined over the year, but still remained attractive. There is no outflow of deposits, - said Dmitry Belousov. - In addition, last year the regions massively carried out the May decrees of the President on raising salaries to the average in the region.

    Deposit rates in the top 10 banks declined from 8% at the beginning of the year to 7.4% in the second half of December, the Central Bank said.


    Director of the Center for Market Research at the Higher School of Economics, Georgy Ostapkovic, considers the growth of household savings as a positive factor for the economy.

    - When the accumulation increases for a rainy day, the economy develops. Money is mostly kept in banks, which then send them to lending to businesses. Business invests funds borrowed into its production, thereby increasing GDP, "explained Georgy Ostapkovic.

    Real wages will continue to increase further, according to the Ministry of Economic Development. Their growth in 2018 will be 3.9%, according to the agency's forecast. However, experts see this as a risk. If earnings grow at a faster pace than productivity growth, then it will create inflationary pressures. Labor productivity this year will increase by 2.2%, predicted in the Ministry of Economic Development.

    Russian Economy General News: #8 - Page 19 04-%D0%9D%D0%B0%D0%BA%D0%BE%D0%BF%D0%BB%D0%B5%D0%BD%D0%B8%D1%8F-2



    “the number of the able-bodied population is now declining in Russia.” This is bad, it means the Russian population is going down.
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    Post  Svyatoslavich on Fri Jan 19, 2018 9:54 pm

    par far wrote:“the number of the able-bodied population is now declining in Russia.” This is bad, it means the Russian population is going down.
    It is temporary and was expected due to the huge decline of births in the 1990's. Anyway, in about 15 years it will pass, people who were born 10 years ago (when there was a mini baby-boom) will be on reproductive age, and the population will grow strongly again.
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    Post  Kimppis on Fri Jan 19, 2018 10:30 pm

    Working age population declining is totally inevitable. The surprisingly steep decline in fertility rates last year was a global phenomenon. And Russian population is still growing due to immigration. Death rate is also still going down quite rapidly, which indicates considerable improvements in health indicators.
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    Post  kvs on Sat Jan 20, 2018 1:45 am

    Austin wrote:

    Russian Economy General News: #8 - Page 19 04-%D0%9D%D0%B0%D0%BA%D0%BE%D0%BF%D0%BB%D0%B5%D0%BD%D0%B8%D1%8F-2


    Where is the super-recession?   It looks like the 2013 was as bad as 2014 and that was before any sanctions and ruble devaluation.    
    This graph is very revealing.  It says that the population is not suffering from the west's financial and sanctions war.   In fact, it
    looks like NATO is having almost no effect on Russian prosperity.
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    Post  Kimppis on Sat Jan 20, 2018 6:16 pm

    Russia’s car industry, machine-building show fastest growth in 2017

    More:
    http://tass.com/economy/986013

    - Russia’s heavy engineering and power engineering industries grew by 10-15% in 2017

    - The pharmaceutical industry posted the growth of 12%

    - Other sectors - such as aviation industry, chemical industry, wood-processing industry and textile industry - have posted the growth of 4-8% in 2017



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    Post  Austin on Sun Jan 21, 2018 4:27 pm

    The external debt of the Russian Federation in 2017 increased to $ 529.1 billion

    http://www.interfax.ru/business/596215
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    Post  miketheterrible on Sun Jan 21, 2018 4:27 pm

    Probably has to do with the bonds they sold last year.
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    Post  kvs on Sun Jan 21, 2018 5:51 pm

    Austin wrote:The external debt of the Russian Federation in 2017 increased to $ 529.1 billion

    http://www.interfax.ru/business/596215

    Therefore the Russian GDP increased accordingly.
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    Post  Kimppis on Mon Jan 22, 2018 7:20 pm

    https://www.rt.com/business/416636-russia-ruble-dollar-dependence/

    Russian ruble prepared for global expansion as dollar dependency drops

    - The Russian currency is seeking to compete with the US dollar in trade with the Eurasian Economic Union and CIS countries

    - Ruble transactions in the EEU are currently worth the equivalent of US$69 billion, compared to US$18 billion and US$5 billion in euros

    - In the last six years, the share of ruble settlements in the EEU has increased from 56 to 75 percent, while the share of the dollar has decreased from 35 to 19 percent

    - Russia is in negotiations with numerous countries, in particular Turkey, Egypt and Iran

    - In Russian-Indian trade, the share of foreign currencies, mostly the dollar, has dropped from 96 to 80 percent

    - Moscow and Beijing have increased the share of ruble-yuan trade from 13 to 16 percent in the matter of a year





    https://www.rt.com/business/416624-russia-record-gold-reserves/

    Russian gold reserves hit historic high, stockpiling record 223 tons last year

    - The Central Bank of Russia (CBR) added 300,000 ounces (9.3 tons) of gold to its reserves in December, bringing the total yearly holdings to a record 1,838.211 tons, worth over $76 billion in monetary terms

    - Russia may dethrone China as the fifth-largest bullion holder as early as the first quarter of 2018. Chinese gold reserves currently stand at 1,842 tons (almost certainly BS, in reality Chinese reserves are probably larger, but anyway...)

    - Acquisitions of the precious metal by Russia reached a record 223 tons last year, accounting for 17.7 percent of overall Russian reserves
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    Post  medo on Mon Jan 22, 2018 11:01 pm

    So, at the end of this year Russia will have more than 2.000 tons of gold, if they keep buying gold with this tempo. russia
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    Post  Austin on Wed Jan 24, 2018 9:00 am

    World Economic Forum The Inclusive Development Index 2018

    Download the pdf for full report https://www.weforum.org/reports/the-inclusive-development-index-2018

    Summary


    The Russian Federation is ranked 19th, and on a positive trend compared with five years ago. Russian performance is, however, uneven across the three dimensions of the Index: it scores relatively better in terms of Economic Development than Inclusion and Intergenerational Equity and Sustainability.

    Russia has recently recovered from a recession, and although its productivity growth is still low, it has now overcome the hardship of 2015. In terms of Inclusion, Russian provides decent living conditions to most of its population but concentrates wealth in a few hands. In fact, the poverty rate is low (0.3%), and median living standards are relatively good in the context of emerging countries, though the wealth Gini (at 82.6) is high. At the same time, income inequality (as measured by the net Gini index) is also relatively high and has increased from five years ago.

    In terms of Intergenerational Equity and Sustainability, Russia has low debt and a positive dependency ratio, yet is depleting its natural resources and, despite recent improvements, has a carbon intensive economy.
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    Post  Austin on Wed Jan 24, 2018 5:19 pm

    Interview : Andrei Klepach: additional budget revenues need to be spent on stimulating the economy

    Подробнее на ТАСС:
    http://tass.ru/opinions/interviews/4896601
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    Post  miketheterrible on Wed Jan 24, 2018 5:58 pm

    Well, no shit.
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    Post  Kimppis on Wed Jan 24, 2018 8:20 pm

    Well, he's a pessimist all right. He doesn't even mention the high interest rates? Maybe he a "liberal", so his narrative on the Russian economy is automatically negative as well? Just speculating.

    However, Goldman Sachs (lol) apparently forecasts a growth of 3.3% for Russia this year, which is the other extreme. So who's right? IMO, the truth is somewhere in the middle, at worst.

    Also, the slowdown during H2 of 2017 was indeed quite severe. GDP actually somehow managed to decline (!) in November, and for the whole year it was closer to 1.5% than 2%. Those interest rates LMAO, althought it's unlikely to matter in the long-term, as the rates will go down sooner or later, just slower than they realistically should.

    Oreshkin: economic growth in Russia could reach 3-3.5% per year in the next couple of years

    Oreshkin considers Goldman Sachs forecast optimistic about GDP growth by 3.3% in 2018
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    Post  miketheterrible on Wed Jan 24, 2018 9:46 pm

    Uh, actually it would be closer to 2%. About 1.8 - 1.9% growth in 2017.
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    Post  miketheterrible on Wed Jan 24, 2018 11:04 pm

    I read the article and it's rather good.

    First off, to state it - he isn't a liberal. Actually, on contrary, what he suggested is usually conservative

    He is talking about that instead of replenishing reserves, it's much better to use excess money for investment and development. Currently, his gripe is that there is a somewhat lacking prospect for mega projects in construction. So he states that after the Crimea Bridge and the arenas, there is nothing else set in stone for 2018. That more projects in infrastructure is needed. Also states there needs to be a much better method for pensioners and or banks to invest locally in said mega projects.

    As well, to invest in the military industrial complex. And as well, to stop expecting money from outside and start looking internally.

    I say it was a good read. He goes into somewhat hysteric mode at start I think to make a point out - slow growth unless we do x thing.
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    Post  kvs on Thu Jan 25, 2018 12:49 am

    miketheterrible wrote:I read the article and it's rather good.

    First off, to state it - he isn't a liberal. Actually, on contrary, what he suggested is usually conservative

    He is talking about that instead of replenishing reserves, it's much better to use excess money for investment and development.  Currently, his gripe is that there is a somewhat lacking prospect for mega projects in construction. So he states that after the Crimea Bridge and the arenas, there is nothing else set in stone for 2018. That more projects in infrastructure is needed.  Also states there needs to be a much better method for pensioners and or banks to invest locally in said mega projects.

    As well, to invest in the military industrial complex. And as well, to stop expecting money from outside and start looking internally.

    I say it was a good read. He goes into somewhat hysteric mode at start I think to make a point out - slow growth unless we do x thing.

    Russian pundits are one-note-Johnny pessimists. He is forgetting about the massive, on-going railway projects.

    Based on the objective evidence so far, it is clear that Putin is using mega-projects to stimulate the Russian economy. But Putin
    is not willing to blow the budget on white elephants. I think Putin is 100% on target. Having the GDP dependent on massive
    state spending is faking the economy, just like the popular near zero interest rates and QE in the west. You get bubbles and not
    real growth. So this "conservative" is a bit of an idiot if he thinks that Russia needs to splurge on mega-projects. All mega-projects
    run out. At least with Putin's approach they are dosed on moderation and are not going to stop any time soon.
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    Post  miketheterrible on Thu Jan 25, 2018 4:56 am

    kvs wrote:
    miketheterrible wrote:I read the article and it's rather good.

    First off, to state it - he isn't a liberal. Actually, on contrary, what he suggested is usually conservative

    He is talking about that instead of replenishing reserves, it's much better to use excess money for investment and development.  Currently, his gripe is that there is a somewhat lacking prospect for mega projects in construction. So he states that after the Crimea Bridge and the arenas, there is nothing else set in stone for 2018. That more projects in infrastructure is needed.  Also states there needs to be a much better method for pensioners and or banks to invest locally in said mega projects.

    As well, to invest in the military industrial complex. And as well, to stop expecting money from outside and start looking internally.

    I say it was a good read. He goes into somewhat hysteric mode at start I think to make a point out - slow growth unless we do x thing.

    Russian pundits are one-note-Johnny pessimists.   He is forgetting about the massive, on-going railway projects.

    Based on the objective evidence so far, it is clear that Putin is using mega-projects to stimulate the Russian economy.   But Putin
    is not willing to blow the budget on white elephants.    I think Putin is 100% on target.   Having the GDP dependent on massive
    state spending is faking the economy, just like the popular near zero interest rates and QE in the west.   You get bubbles and not
    real growth.   So this "conservative" is a bit of an idiot if he thinks that Russia needs to splurge on mega-projects.   All mega-projects
    run out.   At least with Putin's approach they are dosed on moderation and are not going to stop any time soon.  

    Well, that is why this guy even mentioned that the push now for small and medium business growth is the right solution. Yes, there are a lot of mega projects so far, with planned expansion too like the proposed bridge to Sakhalin Island after Crimea bridge is built, which I imagine will be Putin's next tenor promise. That alone will boost growth in that region by a massive amount.

    But the other thing that will guarantee growth in Russia, is if consumers continue to spend. While the theory of "people paid better, they will spend more" holds some truth to it, it isn't necessarily 100% truth. There are a lot of people who just hide the money and that is that.

    There really isn't any magic idea for economics. Its a made up system, it isn't natural. So while in the west everything can be rosy based upon fudging numbers and or relying 100% on debt, Russia is trying to go the route of being honest. While it is ideal and makes them look great overall in the eyes of the nations who don't matter, in the long scheme of things, it paints a big red target over their heads by the US.

    Good thing is though, most economists in Russia are now pretty much stating the same thing "screw them in the west. We must rely on ourselves".

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