Russian Economy General News: #1

But if current oil prices and its expected rise is taken in the account than all of that article does not make any sense. 

A lot of ifs.

They better start regulating those banks then. As well as pushing for more domestic investments ans modernization.

I wonder though, how is this news trust worthy when they didnt even predict something that will happen a month or two later (slower gdp growth). But can determine what happens in 10 years?

Seems good. 

Putin Urges Adoption of Individual Bankruptcy Law

sepheronx wrote:A lot of ifs.

They better start regulating those banks then. As well as pushing for more domestic investments ans modernization.

I wonder though, how is this news trust worthy when they didnt even predict something that will happen a month or two later (slower gdp growth). But can determine what happens in 10 years?

Russia Faces Budget Gaps – Report - here is that article recentlly translated by RIA

In case of "high oil prices" (which is the term in the article to describe current prices) perssst - worst case scenarion is :

In the scenario set out in the document, the budget will be in deficit even if high oil prices persist, and will mainly be covered by government borrowing. As a result, government debt will rise to 18.2 percent of GDP by 2030 from this year’s 12 percent. The Finance Ministry-set limit is 20 percent.


Which is LOL. Anyway I dont see any problem with Putin demanding more than it can be done by Russian officials. It only means they will have more sleepless nights over their job and the end result will be better than in case of realization of the more realistic plan put in place. No plan is ever 100% realized and in order to acchive 110% your goal must be 150%.

Russia Expects ‘Big Problems’ for Budget After 2016 – Minister

MOSCOW, December 6 (RIA Novosti) – Russia’s Finance Ministry predicted serious difficulties Friday for the budget in 2016 and 2017 as slowing economic growth means there will be insufficient funds available to honor spending commitments.

Short term and long term growth forecasts for the Russian economy have been cut repeatedly this year, with officials warning Russia is entering a period of economic stagnation.

“We see big problems in 2016 and 2017,” Finance Minister Anton Siluanov said, Prime news agency reported.

“Now is the time when we need to take decisions about the curtailment of previous commitments so that we can reach a balanced budget in the medium and long term,” he told reporters.

Siluanov said that social spending pledges will be fulfilled, but that wage rises should be accompanied by an increase in efficiency, according to Prime.

Officials expect the Russian economy to grow at just 1.4 percent this year, the lowest rate since the recession in 2009, and far short of the 7 percent annual growth during President Vladimir Putin’s first two presidential terms.

Siluanov singled out defense spending and transfers to Russia’s Pension Fund, which runs a large deficit, as two of the biggest pressures on the budget.

Putin made a series of lavish social spending pledges, the so-called May Decrees, the day after he was inaugurated for a third presidential term in 2012.

A total of 2.1 trillion rubles ($63.7 billion) in the 2014-2016 budget was earmarked for the fulfilment of the May Decrees, Siluanov said in September. That budget was signed into law by Putin earlier this week.

What was promised in May Decree as part of Social Spending for which 2.1 trillion is being earmarked ?

Do we have some facts and figures on it ?

A couple of things come to mind, correct me if my views are wrong.

Agriculture, industry and construction are increasing en mass. Industry output though is around the same as last year but wages are up, so this cuts into profit big time. Some regions are seeing industrial growth, but that is kinda slow growth, while many enterprises, as RPG said, will take time to come online and start production. Till then, its money drained into construction. Biggest issue so far is banking, as has been said by TR1 that many small banks are closing and they are centralizing big banks. I think there is a real lack of regulation in banking sector. Other issue is outright theft of property or finances to said organization. Skolkovo comes to mind. Russia is seeing industrial and technological growth that it has not seen since the Soviet era. What is stunting growth is lost values due to theft, while profits are down.

When the SAP2020 comes to a close, then they may concentrate more on social development. At that point, the military will be around 70% modern and so they can reduce the budget so that they are purchasing enough equipment to replace the remaining obsolete gear in service at same time frame, as well as maintenance, training and cost of personnel, which would be a lot less.

With less defence budget, they could allocate more money into the social development needed to curb the issues like corruption, as well as increasing standard of living.

One thing comes off as odd is that comment about privatization. How is that costing money? It should be adding money to federal budget.  Makes little sense. As well, my understanding is that the tax code in Russia is quite old and a lot of loopholes. They, along with every country, needs to update, simplify and modernize their tax codes. A flat tax rate may not bring in massive amount of money at first, but it is desirable amongst major enterprises.

Dont reduce defence spending too much, as it will hurt many enterprises still competitive in terms of high technologies. I also think that Roscosmos should be added to the aerospace enterprises as a whole, and state assets should be merged in terms of their capabilities, like MCST being merged with Elvees or Module so that can have a consolidated budget and it would be higher, thus more money can be allocated to specific projects.

Oh and I forgot, biggest waste is the Olympics. Its costing a ton of money. We will see if it will pay off in the end.

olympics is 50 billion megafail ...
it will never pay off...
Russians cant build large infrastructure objects on time and on budget.

Rpg type 7v wrote:olympics is 50 billion megafail ...
it will never pay off...
Russians cant build large infrastructure objects on time and on budget.

I dont think anyone does. A small simple bridge here in Calgary Canada ran $10M over budget.

The private buildings like skyscrapers and hotels in Russia is usually on time and budget. Government contracts and projects like olympics? Yeah, over budget and late.

Although, investment in Sochi was needed big time. But should have just been opened as a tourist destination with private enterprises in building it up.

Russian budget may lose $51.5bn in 2014-2016
http://rt.com/business/

The Russian state budget may lose 1.7 trillion rubles ($51.5 billion) in 2014-2016, according to assessment of tax and customs authorities, Prime news agency reported. The budget may not receive 338 billion rubles ($10.2 billion) of revenues in 2014, 562 billion rubles in 2015 and 792 billion rubles in 2016, the project of budget strategy till 2030 said. There will be no additional revenues for the budget during the next three years, Finance Minister Anton Siluanov said.

AFAIK it is already a bit of a resort town for skiing in winter.

The idea if having the Olympics there was to upgrade infrastructure and to aide growth and promote development.

A lot of things like large venues that would otherwise stand empty after the games are designed to be able to be taken down and moved elsewhere so it is actually a good thing really.

^^ How would Russia increase Effeciency of its workforce , Putin was stating to increase effeciency 6x times.

As far as Ukraine going , its better Russia stop giving them Sops to join CU ... if they want to join EU then so be it ....the only concession Russia should extract is Ukraine will not join NATO and be Neutral and Black Sea Fleet remain there.

EU/Eurozone is any way a dying state and Ukraine is in ICU adopting such countries in CU with lots of SOPS will make Russia a Sick patient from the healthy state it is in

Austin wrote:^^ How would Russia increase Effeciency of its workforce , Putin was stating to increase effeciency 6x times.

As far as Ukraine going , its better Russia stop giving them Sops to join CU ... if they want to join EU then so be it ....the only concession Russia should extract is Ukraine will not join NATO and be Neutral and Black Sea Fleet remain there.

EU/Eurozone is any way a dying state and Ukraine is in ICU adopting such countries in CU with lots of SOPS will make Russia a Sick patient from the healthy state it is in

This logic is nonsense.

Why going on a sinking ship just because it is the "Black Pearl" rather than going on a ship with a none hyped name that actually swims on the water and not below.

This is nothing else but what the US did before just to weaken and losse more and more the former USSR countries from russia, trying to take better global positioning around russia. They faked one color revolution after another, that is no secret, they bribe and invest hundreds of millions each year to harm reputation of russia that people get the perception of who is bad and who is "good". They even paid such retarded groups like FEMEN. Here in germany there was a documentation about FEMEN which tried to make them look good and russia and ukraine bad along with putin, but they made one huge mistake. When the reporter asked in an interview what they do for living, they said:

We are studying and we get asked by a western company to demonstrate for that and this and we recieve 10.000$ per month. wrote:

Lot of demonstrations were financed and performed by western countries especially and constanly through the US. In russia they invited "gast-arbeiter" to russia to demonstrate and get paid for that, some phony "pro-putin" demonstration were also performed in same manner to blame putin that he ordered foreigners to do that for him.


And ukraine is the same case, there is no logic behind that to join a sinking ship that brings absolute nothing in short nor long term to Ukraine.

 

Russia national debt clock

Not sure if that debt data is reliable as it shows GDP ~ $1.5 Trillion but today GDP is $2 trillion

‘If you build it, they will come’ - Russia's financial field of dreams

Russia pivots towards industry, not reliant on oil - Medvedev

Austin wrote:Not sure if that debt data is reliable as it shows GDP ~ $1.5 Trillion but today GDP is $2 trillion

Tnx Austin. Did not notice that - but nevertheless info seems true.

Viktor wrote:

Austin wrote:Not sure if that debt data is reliable as it shows GDP ~ $1.5 Trillion but today GDP is $2 trillion

Tnx Austin. Did not notice that - but nevertheless info seems true.

Russia Domestic Debt is around 11.5 % of GDP today

Russia External Debt is around 34 % of GDP

http://www.cbr.ru/eng/statistics/print.aspx?file=credit_statistics/debt_sustainability_e.htm

Ministry raises Russia’s surplus forecast to almost $175 bln in 2013.
http://en.itar-tass.com/russia/711036
Russia
December 11, 1:12 UTC+4

MOSCOW, December 10, 22:51 /ITAR-TASS/. Russia’s foreign trade surplus is projected to be at 174.4 billion U.S. dollars in 2013, Deputy Economic Development Minister Andrei Klepach told reporters early this month.

In 2013, Russia’s export is forecasted at 515.4 billion U.S. dollars (initially - 511.4 billion U.S. dollars), while import - at 341 billion U.S. dollars (earlier - 343.5 billion U.S. dollars), the deputy minister said.

Under the ministry’s estimate, next year’s export will be at 504.6 billion U.S. dollars, while import - at 349 billion U.S. dollars. Therefore, the foreign trade surplus will make up 155.6 billion U.S. dollars in 2014.

Earlier, the Economic Development Ministry forecasted Russia’s surplus at 169.7 billion U.S. dollars in 2013 and at 152.8 billion U.S. dollars in 2014.

 

Russia to get tens of billions of dollars from de-offshorisation of economy

Everyone Needs To Remember That Ukraine Is Not A 'Prize' But An Enormous Liability

@Austin,

this guy in your link who happens to have studied in the pinnacle of American education and work as a professional analyst specializing -supposedly- in Russian economy and DEMOGRAPHICS
is such a cheap crook that he stated somewhere in the middle of his article:

The other thing to keep in mind is that Ukraine’s population is collapsing and that this collapse shows no sign of abating. Everyone knows that Russia is “dying” and that it’s aging and shrinking population will doom it to economic, military, and diplomatic irrelevance.

He seems to ignore the U-turn Russia's demographics achieved once national policy focused on increasing fertility rates. From 1.40 climbed to 1.70 in a matter of five years and this year's performance should be at 1.77 and this is only the beginning... while in the same time Europe's ...sample of countries... score miserably and captain Germany scores second worse worldwide after only Japan... And US itself is a matter of 3 years increase to grasp if not for blacks and Latins...

So much for this self-claimed experts...

By the way, this demonstrates once more what I said in the last post about confidence. Americans having nothing but arrogance and optimism hope that they will panic away their opponents and to my amazement Russians and Indians still bite from time to time...

Forbs is crap, muvh like WSJ, Bloomberg and Fox. So called experts but no real evidence. So calledvprofessionals were saying about Russias impending doom in the early 2000's.

Although, I think the guy may have been sarcastic, cause his own graph would have proved him wrong.

I hope this works !! Russians could use this money.

Russia to Get Tough on Shadow Economy


and few days later

Top Russian Companies Pledge to Reduce Offshore Dependency

Putin on WTO 

Russia’s WTO entry will protect its exporters – Putin
“We are yet to reap its fruits, we are set to do it sooner or later,” he added.