Russian Economy General News: #13

Russian economic growth hits 5.4%, 05.19.2024.

The economy expanded in the first quarter despite Western sanctions, according to the national statistics service.

Russia’s gross domestic product (GDP) grew by 5.4% year-on-year in the first quarter of 2024, the state statistics agency Rosstat said in a preliminary report published on Friday.

According to the estimates, Russia saw robust growth in retail turnover (up 10.5%), manufacturing (up 8.8%) and construction (3.5%) in January-March.

The Rosstat data aligns with an earlier estimate from the Economics Ministry, but exceeds that of the Bank of Russia (4.6% growth) and analysts’ expectations (5.3%). The agency is due to publish more detailed data on GDP in mid-June.

According to an earlier forecast from the Bank of Russia, GDP growth is expected to slow in the second quarter due to tightening fiscal conditions. The regulator, however, expects consumer and investment demand to remain high and continue to drive economic growth.

The positive data comes despite multiple rounds of Western sanctions introduced since the start of Russia’s military operation in Ukraine in February 2022.

The measures have ranged from blacklisting most Russian banks and cutting them from the SWIFT interbank messaging system, to freezing some $300 billion in Russian foreign exchange reserves.

As a result, GDP suffered a downturn in 2022, contracting 1.2%. However, data for 2023 showed that the economy has recovered, posting growth of 3.6%. Many analysts have attributed this performance to Russia’s trade pivot to the East, and economic policies implemented to offset the effect of restrictions.

In April, the International Monetary Fund (IMF) said it expects the Russian economy to grow faster than all advanced economies in 2024. GDP is forecast to expand by 3.2%, exceeding the expected growth rates for the US (2.7%), the UK (0.5%), Germany (0.2%) and France (0.7%).

Russian Finance Minister Anton Siluanov earlier said he expects GDP growth in 2024 to equal that of last year, while the Bank of Russia has been more cautious in its predictions, expecting growth of 2.5-3.5%.

https://www.rt.com/business/597842-russia-economy-growth-quarter/

India sharply increased purchases of diamonds from Russia, 05.19.2024.

India more than doubled its diamond purchases from Russia in March.

MOSCOW, May 19 – RIA Novosti. India in March increased its purchases of diamonds from Russia more than doubled in annual terms, RIA Novosti calculated according to the Ministry of Industry and Trade of the republic.

Thus, in March, Indian imports of diamonds from Russia in annual terms increased 2.3 times, to 728 thousand carats.

At the same time, New Delhi increased the import of stones from Canada to 354 thousand carats from only 210 carats in March last year. Imports of diamonds from China also jumped - 2.6 times, to 122 thousand carats, supplies from Hong Kong increased by 15% .

But even this growth did not help compensate for the lost supplies from Belgium - its exports to India fell by two million carats, to 2.1 million, and from the UAE - by 900 thousand carats, to 7.3 million carats. The import of stones from the USA (by 3.7 times, to 155 thousand carats), Israel (by 1.8 times, to 110 thousand carats), Botswana (-12%, 214 thousand carats) and South Africa (by two percent, to 110 thousand carats) also decreased. up to 255 thousand carats).

As a result, India's total diamond imports fell to 12.15 million carats from 14.7 million a year earlier.
On March 1, Western countries began to gradually limit the import of Russian diamonds processed in third countries. After this, several Western media outlets circulated a letter sent to the Antwerp International Diamond Center (AWDC) by businessmen involved in the diamond trade. In it, they highlighted the long and costly delays they were already experiencing, as well as the negative impact of restrictions on all their operations, and called for a review of new procedures "due to the threat of disrupting Antwerp's centuries-old diamond trade."

In response, the regulator admitted that the sanctions led to disruptions in supplies to the world's largest diamond trading center in Antwerp , Belgium , due to new requirements for the declaration and customs clearance of precious stones.

https://ria.ru/20240519/almaz-1946974533.html

The stock market will support Russia's financial sovereignty, by Dmitry Skvortsov for VZGLYAD. 05.22.2024.

Anti-Russian sanctions gave Russia the opportunity to turn the most important instrument of sovereignty on its head - the stock and financial markets. What was the problem of Russian financial institutions until recently, how is it being solved now – and what does this mean from the point of view of the country’s economic sovereignty?

Building a self-sufficient financial market in Russia is one of the key tasks of the Ministry of Finance. Anton Siluanov stated this when speaking in the State Duma before his confirmation to the post of Minister of Finance. “We need to have our own resources to finance investments, for economic development,” he explained.

Russia has been on the path of integration into the global financial market for a long time. Due to the different weight categories of domestic and global financial institutions, a significant part of Russian investment resources was invested on foreign stock exchanges. The largest Russian companies conducted IPOs on foreign markets (there they could place a larger volume of their shares at a higher price, that is, attract more capital). Russian banks and brokerage houses offered their Russian clients to place their funds on foreign platforms.

As a result, capital outflow from Russia, according to the Central Bank, in some years exceeded $100 billion. The own market was left with pitiful crumbs of Russian capital.

Growth instead of collapse

But money is the lifeblood of the economy. Without investment there is no business. As a result, economic growth in Russia largely depended on two parameters: firstly, what part of their profits would be used by successful Russian companies (such as Gazprom or Norilsk Nickel) for their own development, and secondly, how much money would remain in the country after the outflow capital abroad.

The West's confidence that sanctions would collapse the Russian economy was based precisely on these circumstances. Capital had to leave Russia, and the valve of foreign investment had to be closed. Economics - to be left without money and die.

But it turned out that not the entire Russian economy was critically dependent on foreign financial markets. Russia was also helped by a positive trade balance and the fact that Russian GDP accounts for more in the real sector and less in the services market (including financial services).

As a result of the growth of the defense sector (and its related metal and component suppliers), the Russian economy began to grow at an accelerated pace, eventually ranking fifth in the world. This growth was ensured by an increase in budget expenditures.

But such growth stimulation has its limits. It is necessary to ensure the further economic development of Russia, and for this it is important to reformat the Russian stock market. This is precisely what Siluanov has in mind. However, the challenge goes far beyond finance itself.

Own financial infrastructure

As long as Russia was included in the Western world, one could count on purchasing a number of goods and technologies abroad. In today's situation, the question of the transition to technological sovereignty has come to full attention, which means the presence in the country of a full range of all key technologies of its own production. The same approach is logical in the field of education and science.

The state's financial system must also be independent of global economic institutions such as the IMF and the World Bank.

And of course, it should not depend on the global emission center represented by the US Reserve System. “The systemic issue is strengthening the financial sovereignty of our country. This is the most important condition for increasing investment in high-tech companies, industry, agriculture and many other sectors,” President Vladimir Putin previously noted .

An important step towards achieving financial sovereignty should be the creation of an appropriate infrastructure, a system that allows citizens to accumulate savings and direct them to economic development projects. If we are cut off from the Western financial market, it is necessary to create its domestic analogue, which works at least as well.

Invest in Russia
Russian investors were cruelly deceived by the West - their capital placed in Europe and the United States ended up frozen after anti-Russian sanctions. Currently, preparations are being made for the repurchase of blocked foreign securities owned by Russian residents. In response, the funds of a number of foreign companies in Russian type “C” accounts will be unfrozen. This procedure is reminiscent of the exchanges of prisoners of war carried out from time to time with Ukraine.

Significant financial resources should return to Russia; Russian citizens will be able to use this money to buy Russian, rather than foreign, shares. This will ensure the growth of the domestic stock market and the financing of domestic companies.

However, the goals announced by Siluanov are even more long-term in nature. And it’s not just that trust in institutions and participants plays a huge role in financial markets; reforming the financial market infrastructure is also a challenge. This infrastructure is extremely large and inertial.

Now Russian banks make money mainly from lending to individuals (consumer loans, car loans, mortgages), export-import transactions and currency speculation. Loans for industry are a rare exception. As a rule, they are associated with some preferential government programs in which the state compensates part of the interest rate. Without this, at the current rate, loans for investment projects are very expensive.

A developed stock market serves as an effective mechanism for sterilizing excess money supply, and therefore reduces inflation. If the domestic stock market can perform these functions, the Central Bank will be able to soften its monetary policy, and inflationary pressure from rising wages and increasing consumer demand will decrease (just by the amount of investment). And easing monetary policy (cutting rates) always has a beneficial effect on economic growth. Banks will be able to lend more actively to industry.

Russia lacks institutional investors, such as non-state pension funds (NPFs), which in the West are required by law to pursue a conservative investment policy. The possibility of lowering the requirements for companies placing shares on stock markets (conducting an IPO) for the first time is currently being discussed, so that NPFs have fewer restrictions on purchasing their shares. In particular, it is proposed to reduce the IPO volume threshold from 50 to 3 billion rubles. According to Central Bank analysts, this could provide an additional 2-3 trillion rubles inflow to the stock market in the first year.

Private investors have not been left out of the spotlight either. Investment accounts of the IIS-3 type are being introduced for them, which provide a system of benefits that encourage them not to withdraw funds from the brokerage account for several years.

There is no need to completely copy Western stock markets. But this kind of infrastructure allows young and active businesses and promising innovative companies to receive the financing necessary for development.

The money of Russian citizens and businesses will fuel the Russian economy and not go abroad. This accelerates technological progress and economic growth. This means that an independent financial base is being created for the full economic sovereignty of Russia.

https://vz.ru/economy/2024/5/22/1268170.html

Russia intends to replace imports of non-food consumer goods , by Tatiana Karabut for Rossiyskaya Gazeta. 05.29.2024.

Since the introduction of the food embargo in 2014, Russia has been able to increase the share of domestic products - now it is about 80%. The challenge now is to increase domestic production of non-food consumer goods while imports take up half the market. This was stated by the head of the Ministry of Industry and Trade Anton Alikhanov at the Russian Retail Week forum.

He noted that at the end of 2023, retail returned to its growth trajectory: the food sector grew well, and the turnover of non-food products increased even more. And based on the results of the first quarter, the upward trend continues.

According to X5 Group President Ekaterina Lobacheva, with rising incomes, consumers are seeking to diversify their menu - for example, fish consumption has been growing recently. But at the same time, the savings model of consumption remains: the buyer wants good quality at an affordable price. In this situation, trade seeks to predict price increases in some goods and stop the situation without waiting for a crisis, as happened last year with eggs. Now chains understand that there may be a shortage of fruits and vegetables due to frost. Therefore, trade plans in advance for imports from neighbouring countries.

Alikhanov believes that the retail business is successfully coping with unprecedented external pressure: if in 2022, due to the departure of some transnational brands, the number of vacant spaces in shopping centers was 15-20% depending on the region, now it has decreased to 5-8%. “And I’m very pleased that the vacated spaces are being occupied by domestic brands, which are now growing at a double-digit rate, ahead of brands from Turkey, China and Belarus,” the minister emphasized.

Alikhanov recalled that after the first wave of anti-Russian sanctions in 2014, the share of domestic products in retail chains increased significantly - from 65 to 80%. Thus, managing director and board member of the Magnit chain Anna Meleshina recalls that 10 years ago everyone was worried about what would happen to cheeses. But complete import substitution for this position quickly occurred. At Magnit, the share of imported cheeses has decreased over 10 years from 80% to 25%.

Now the task is to replace the import of non-food products. And this is more difficult, since “the non-food sector is larger, the nomenclature there is more complex and interesting,” the minister explained. According to his estimates, now approximately half of the non-food sector's turnover is imports (about 10 trillion rubles).

The number of vacant spaces in shopping centers has decreased from 15-20% to 5-8%. Vacant places are taken by domestic brands.

“That is, the market volume is simply gigantic, this is a lot of room for investment. And we are able to produce a very wide range of non-food consumer goods in large volumes and do it with very high quality; and in a number of areas we have seriously underutilized capacities,” Alikhanov said. Thus, in cosmetics and perfumery, the load at different factories ranges from 40 to 60%. Thus, “there is room to grow,” he believes.

In order to increase the share of Russian products in retail (both offline and online), a bill on the “Russian shelf” has been prepared, according to which the share of domestically produced goods in stores or in the issuance on marketplace sites will be established.

At the same time, not only traditional retail is important, but also online channels. Over the past five years, the sector has grown almost fivefold to a turnover of over 4 trillion. And since online trading has become a significant part of the economy (marketplaces account for 15% of all trade), it cannot exist outside the regulatory field.

Therefore, the rights of partner sellers and owners of order pick-up points must be specified. And of course, the consumer must be protected from fakes and counterfeits. Now such a bill is being discussed with State Duma deputies and senators. Alikhanov emphasized that the goal of the Ministry of Industry and Trade is not to tighten the screws, but to create transparent rules of the game. Marketplaces have much higher market power than small manufacturers or sellers.

Representatives of traditional trade believe that marketplaces are now in a much more privileged position. For example, online trading widely uses self-employed people, which results in “a wide delta of opportunities, including in terms of wages,” says Petrovich CEO Evgeniy Movchan.

https://rg.ru/2024/05/29/rossiia-namerena-zameshchat-import-neprodovolstvennyh-potrebitelskih-tovarov.html

Non-food imports are mostly consumer products. There is no particular rush for Russia to replace them. Such imports help to keep
inflation down, just like they do in the west. There would be a problem if Russia was excessively dependent on such imports like
a banana republic. My point is that too much economic engineering for reductionist goals is bad. NATzO's sanctions tantrum has
been a plug clearing boon for Russia, let it equilibrate in the short run and then "force" some action.

Of course, strategic sectors need to be secured and should not be farmed out offshore. But this has been a problem for the last
34 years anyway. For example, semiconductor manufacturing. Anyway, the current climate is conducive to the development of
strategic sectors in Russia.

The Russian economy is in tatters!!!!

The Russian economy is only 4 times smaller than the American one. However, the US economy is partly virtual and based on generating debt. The question is how virtual is it? Perhaps it is realistically only twice as large as the Russian one.

franco wrote:The World Bank has revised its data for 2022 and declared Russia not the fifth, but the fourth economy in the world in terms of purchasing power parity (PPP). Updated figures are published in the organization's report.

The material states that in 2021, Russian GDP in PPP terms amounted to $5.7 trillion, thereby our country surpassed Japan and Germany in this indicator, taking fourth place in the corresponding ranking. At the same time, the positive trend continued in the next two years with indicators of 6 trillion and 6.45 trillion, respectively.

It is worth noting that in 2022, the World Bank published data in which Russia, in terms of GDP in PPP terms, surpassed only Germany, falling short of Japan. Then the Russian Federation was given fifth place in the ranking. However, according to comments from representatives of the organization, when compiling that rating, analysts were guided by 2017 indicators.

It is not entirely clear why this happened, and also why the error was discovered only now. Meanwhile, we can confidently conclude that the Western sanctions strategy did not allow the United States and its allies to cause the collapse of the Russian economy.

Recall that GDP at PPP is the ratio of nominal or real gross product to the exchange rate at purchasing power parity. In turn, PPP is the ratio of prices for the same set of goods and services in different currencies.

https://topwar-ru.translate.goog/243482-po-dannym-vsemirnogo-banka-rf-s-2021-goda-stala-chetvertoj-jekonomikoj-mira-po-paritetu-pokupatelnoj-sposobnosti.html?_x_tr_sl=auto&_x_tr_tl=en&_x_tr_hl=en

NOTE: would have liked to see links but interesting in any case.

You don’t need a link, just open up the world bank report

https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD

America's GDP is basically a load of idiots buying and selling amongst themselves.
Look at the costs of healthcare and university education USA vs Russia.
They aren't a lot different in quality. But America is over-invoicing many times over. Which results in education AND healthcare so expensive, even the well off struggle to pay for it. Meanwhile in Russia, both are largely free... resulting in no massive inflation of GDP. Same with America and 40 yr mortgages on homes etc.

Russia just needs to free up the rest of the Russian World. It can then enhance valuable partnerships around the BRICS world and similar. Uncle Satan will soon find no one is willing to fund it's wars of terror via fading concepts of dollar hegemony.

The US GDP is inflated with the "financial industry".   The factor of 4 claimed above is meaningless.  The US will generally have twice the GDP of Russia since it has
twice the population.   This is GDP that does not matter for power projection.    The Russian MIC is grossly undervalued.   It is not even included in the PPP factor
estimate and specifically it is not subject to it.   A PPP factor of 2.5 for the consumer economy does not fit the Russian MIC.  Based on prices for large ticket items
(e.g. submarines) the PPP factor is closer to 6.  But it is even higher for many lower level costs.    The US is super-efficient in milking the tax payer with extortion
level military prices, for example $7,000 (1980s prices) for toilet seats.   This is why the Pentagon can't account for trillions of dollars of expenses in the last 40 years.

Evaluations of Russia's military based on its nominal dollar budget are retarded.    Taking the 2021 budget of about $65 billion, we get a PPP budget of $390 billion.
Considering that the US budget includes spending on 800 foreign bases, which is mostly corruption feeding mundane item suppliers (e.g. food rations and bedding) (*), and
stellar white elephant products such as the Littoral Combat ship and the F-35, the US military budget is not so grand.   The fact that the US cannot even produce a
couple of million 155 mm shells per year says it all.   Huge budget, no production capacity.  Where does the money go?  Space lasers and rail guns?

The "financial industry" is about 50% of the US GDP.   So excluding it leaves us with a GDP per capita comparable to Russia.  But one thing the US definitely leads Russia
by far is in the wealth stratification.   It puts all banana republics in total shame.  

(*) US foreign military bases follow their prison complex prices.   It costs well over $50,000 for each prisoner (this is old from 15 years ago, it is now probably
twice as high) and the ratio of guards to prisoners is not 1:1 and simply cannot explain this.   It is all sub-contracting grift.

Well that's interesting

If our GDP PPP as of 2023 was $6.45 trillion, and our population as of 2023 was say 146 million (not taking into account new territories here, and not sure if Crimea is part of that GDP PPP figure) - then that would land our GDP PPP per capita at just over $44k

Which is really not that bad. On the cusp of being a high-income country essentially. Portugal's GDP PPP per capita back in 2022 per that World Bank report was $44.5k. Greece and Cyprus's back in 2022 were just over $39k, and we were already ahead of them even back in 2022 (Russia's in 2022 was $41k). And half these country's GDPs are probably from like real estate besides.
We've beat out Turkey too, they were at some $38.3k in 2022

It was barely a few months ago that the Russian govt. was set a target of beating Japan in GDP PPP by 2030 to take the 4th place.
Since that has already been met, and catching up to the US/China/India is impossible - I should rather like to see new targets being set for overtaking various developed countries by GDP PPP per capita instead.

I personally think reaching Italy's/France's/UK's GDP PPP per capita by 2030 is realistic. As of 2022 they were all sitting at about $55.5k - $57.5k per capita, and can't have increased by much as they are all currently growing a lot slower than Russia's economy; less than 1% last year all 3 of them.

US will meet Russia on the way down. 

Russian Central Bank notes that Russia has almost 40 times more retail investors today than in 2018, 06.06.2024.

ST. PETERSBURG (Sputnik) — Russia is experiencing a boom in retail investors whose players have multiplied almost 40-fold in six years, said the governor of the Central Bank (BC), Elvira Nabiulina.

"The retail investor class has emerged here, people have started investing in the capital market," Nabiulina said while speaking at the St. Petersburg International Economic Forum (SPIEF).

The governor said that the number of retail investors has skyrocketed from about 100,000 in 2018 to about 3.8 million today.

"Unfortunately, this has to do with the withdrawal of foreign institutional investors, but its importance increased. It is a foundation for the future," she said.

The XXVII edition of the SPIEF will be held from June 5 to 8, with the participation of representatives from 136 countries under the theme: "The basis of a multipolar world. Formation of new points of growth."

The first edition of the SPIEF was held in 1997, and since 2006 it has been organized with the sponsorship and participation of the President of Russia.

In more than 25 years, the SPIEF has become the main international platform for contact between representatives of the business community and a space for discussion on fundamental economic issues for Russia, developing markets and the world in general.

Yandex Translate from Spanish.

https://latamnews.lat/20240606/el-banco-central-senala-que-rusia-tiene-hoy-casi-40-veces-mas-inversores-minoristas-que-en-2018-1155272083.html

Russian banks should introduce pre- and post-fixed deposit rates for their investment options yields, coordinated by the RCB, on the basis of the current & future key rate predictions.

That piece above is ridiculous. They try to fob off the 40 fold increase in retail investors via the "tragic" departure of foreign retailers. There is a basic logic fail here.
Since these investors were there in 2018 and there has a been a 40 fold increase in the number of such investors since 2018, that implies that the number of these
precious foreign retailers was tiny. Russia has seen the departure of retail oligopolists. Cry me a river.

Kiko wrote:Russian banks should introduce pre- and post-fixed deposit rates for their investment options yields, coordinated by the RCB, on the basis of the current & future key rate predictions.

Nabiullina's obsession with non-existent Russian inflation is suppressing Russian economic growth. People who are singing her praises are detached from reality. Like some
personality cult they attribute to her all sorts of success that she has no control over. Russia needs deposit rates that are true inflation + a small additional amount. The
current 16% rate is ludicrous.

When Russia was running an inflation of around 15% the prime rate was lower. There was no hyperinflation meltdown. That was over 10 years ago when the Russian economy
was way more prone to inflationary instability. The current CBR policy is moronic delayed reaction overkill.

The policy realm of the deciders is afflicted with idiocy around the world. Looks like retarded scum is what rises to the top.

kvs wrote:Nabiullina's obsession with non-existent Russian inflation is suppressing Russian economic growth.   People who are singing her praises are detached from reality.   Like some
personality cult they attribute to her all sorts of success that she has no control over.    Russia needs deposit rates that are true inflation + a small additional amount.   The
current 16% rate is ludicrous.  

When Russia was running an inflation of around 15% the prime rate was lower.   There was no hyperinflation meltdown.   That was over 10 years ago when the Russian economy
was way more prone to inflationary instability.   The current CBR policy is moronic delayed reaction overkill.

The policy realm of the deciders is afflicted with idiocy around the world.   Looks like retarded scum is what rises to the top.

See Turkey for an emerging economy that has prioritized growth over reducing inflation for all this time

How are they doing these days?

The first Sberbank ATMs were installed in the DPR and LPR, 06.09.2024.

The first ten Sberbank ATMs began operating in the DPR and LPR. This was reported by the bank's press service at the St. Petersburg International Economic Forum (SPIEF).

ATMs are operational in Donetsk, Lugansk and Makeevka. Service is possible using a card and biometrics, as well as using a smartphone through SberBank Online using a QR code.

The bank's press service added that by July 1, the total number of Sber ATMs in the DPR and LPR will reach 50 devices. ATMs will mainly be installed in Donetsk and Lugansk.

https://www.rbc.ru/rbcfreenews/6664ea779a79475e8b6e8c13

Russian industry felt real optimism, by Dmitry Skvortsov for VZGLYAD. 06.17.2024.

Statistics show explosive growth of industry in Russia. “This has never happened in Moscow,” the mayor of the capital, Sergei Sobyanin, describes the impressive growth rates of industrial production in his region alone. Which industries are growing the fastest and why?

Reality has once again refuted the pessimistic forecasts of Western economists about the prospects for the Russian economy. The business activity index (PMI) for the Russian manufacturing industries in May rose to 54.4 points from 54.3 points in April.

This “indicates a sharp improvement in the Russian manufacturing sector,” S&P Global reports . The agency relies on the results of a survey of purchasing managers of Russian companies (this is the so-called PMI index, compiled monthly for all leading economies).

In March, activity in Russia's manufacturing sector grew at the fastest pace in almost 18 years. At the same time, as the results of the S&P survey showed, then for the first time since October 2023, a significant increase in export orders was recorded. That is, Russia is increasing not only its supplies of energy resources and food abroad, but also increasing industrial exports.

These data are confirmed by Rosstat. According to statistics published at the end of May, in Russia in January–April 2024, industrial production increased by 5.2% compared to the same period in 2023.

Recognizing the resilience of the Russian economy in the face of sanctions, international experts predicted an industrial decline for Russia. “In the medium term, the Russian economy will be hampered by the departure of transnational corporations, the loss of human capital, and its disconnection from global financial markets,” IMF spokeswoman Julie Kozak said in August 2023. “And so we expect that in the medium term, production in Russia will be 7% below the pre-war forecast.”

However, already 2023 showed growth of the Russian economy by 3.6%. Moreover, a significant part of this growth was provided by industry. In the last quarter of 2023, capacity utilization increased to 81% (very high by Western standards).

In 2024, economic growth in Russia continued. In the first quarter of 2024, Russia's GDP increased by 5.4% compared to the first quarter of 2023. Industry is also growing.

“Despite unfriendly actions, domestic industry is developing dynamically,” says head of government Mikhail Mishustin. – Primarily due to processing, in April we recorded an increase of more than 8%. Mechanical engineering has also remained the main driver for several months; in the same month, output increased by 30%; if we talk about segments, then, for example, the creation of computer and electronic equipment has already expanded by 44%.”

And this is data only for the largest sections of economic statistics. Efforts to import substitution and strengthen technological sovereignty have led to the emergence of new industries in Russia - for example, components for equipment, consumables for used imported equipment, etc. All these industries contribute to overall growth.

The situation is especially indicative in the most industrialized regions, for example, in the capital. “In Moscow, this has never happened before, when the volume of manufacturing industrial production grew by 18% per year, and this is not only the defense industry, this is everything: pharmaceuticals, mechanical engineering, almost all key sectors,” says the mayor of the capital, Sergei Sobyanin. Moreover, according to him, “the whole country is demonstrating quite serious growth.”

Western analysts (and some Russian liberal economists) interpreted these data as a short-term surge caused by an increase in defense orders, casting doubt on the prospects for industrial growth.

But business practitioners - directors and leading managers of companies (on the basis of whose survey the index is compiled) - are more optimistic. This sentiment is reflected in the business activity index (PMI) mentioned above.

What are the reasons for optimism and why is Russian industry growing at such a fast pace? There is a combination of several key factors that stimulate industrial and economic growth in general. Of course, the increase in government spending on the purchase of industrial products, including military products, is important. In addition, there is a noticeable increase in investment in the creation of new industries and the development of existing ones. There is also an increase in non-resource exports and an increase in household spending (which is combined with an increase in savings, which ensures the long-term nature of this demand).

In other words, the population supports the demand for domestic industrial products.

“Currently at SPIEF there was a discussion about how to fill the market with goods. It is possible through imports - but then it turns out that we will work for imports. We don't need this. The development of domestic industry and the production of consumer goods meets this demand from the population,” Alexey Zubets, director of the Institute of Social Economic Research of the Financial University under the Government of the Russian Federation, explained to the VZGLYAD newspaper.

In turn, exports (including non-raw materials) maintain a positive trade balance. Russia has significant finances for purchasing abroad those components that have not yet undergone import substitution, and means of production: machines and equipment for new domestic factories. In January–April alone, the trade surplus increased by 18.8%, to $50.5 billion.

A balanced trade balance is achieved largely through the restoration of non-resource exports. This reduces Russia's dependence on world prices for hydrocarbons.

Moreover, export diversification strengthens Russia's foreign economic influence. Export of technically complex products (and consumer goods occupy a small share in Russian exports) strengthens ties with importing countries to which our specialists are sent: equipment adjusters, designers, workers. Those who will operate our equipment come to us for training. That is, export is not only a way to earn foreign currency, but also becomes a tool of soft power.

A striking example is nuclear energy. Russia not only builds reactors, but also trains specialists and often creates new industries in the economy of the customer country, helping to create highly qualified scientific and technical personnel there.

Trends in expanding non-resource exports are just beginning to develop. Therefore, domestic business as a whole is confident that the favorable market situation will continue.

However, not only domestic business is confident in the continuation of economic growth in Russia; foreign entrepreneurs still operating in the Russian market also think so. As it turned out, many of them did not leave Russia. This was shown by a recent report from the Vienna Institute of International Economic Research. The document states that “only 9.5% of foreign companies have completely left Russia.” And many corporations that announced the start of the process of getting rid of Russian assets, either announced a change in their decision, or, without advertising, continue to expand their activities in Russia amid talk of future departure. Including in the field of industrial production.

https://vz.ru/economy/2024/6/17/1261430.html

The ex-head of Avtodor, Sergei Kelbakh, will go to prison for 12 years and pay 1.9 billion rubles for abuse of office during the construction of the Central Ring Road in the Moscow region. 


The court also banned him from holding certain positions for three years. 


According to the investigation, in 2017, Kelbakh illegally allocated more than two billion rubles to one of the companies involved in the construction of the Central Ring Road, and two years earlier, the same company, on his instructions, received another 3.9 million rubles from the budget. He also paid 132 million rubles for the development of documentation for the Central Ring Road. This work was not provided for by the federal target program. 
Zvezdanews reports

Ukrainians presented their new unmanned boat STALKER-5.0 for 60 thousand euros It is equipped with a Starlink terminal, the warhead weighs 150 kg, and the drone reaches a speed of 55-75 km/h. @ukr_leaks_eng