Russian Economy General News: #1

Austin wrote:So if these projections are correct , Russian GDP by 2016 will grow to  86.837 trillion or $ 2.691 Trillion compared to todays $ 2 trillion

Rpg type 7v wrote:

Austin wrote:So if these projections are correct , Russian GDP by 2016 will grow to  86.837 trillion or $ 2.691 Trillion compared to todays $ 2 trillion

no way in hell... 

from previous post

From previous news Russian conventional Oil reserves are at 28 Billion Tons ( C1 category (proven reserves) totals 17.8 billion tons; category C2 (preliminary estimated reserves) is 10.2 billion tons ) http://rt.com/business/russia-oil-gas-reserves-putin-015/

Bazhenov Formation upper limit is 22 billion Tons

So Conventional Oil 28 Billion Tons + Shale Oil 22 Billion Tons = 50 Billion Tons = 357 Billion Barrel of Oil Equivalent ( bboe )

Viktor wrote:Not nice. 

Russian Bank Debt to Reach 10 Trillion Rubles in 2013

TR1 wrote:Russian banks are closing at a serious rate right now, there were a crapton of smaller ones and government wants to centralize several big ones.

Austin wrote:Better to let these bad banks sink along with bad debts rather then bail out on public money and load the bad debt on public like they did in US and Europe.

AlfaT8 wrote:Hate to interrupt this intriguing discussion, but i feel like i just had to post this interesting article of George Friedman and his views or "Forecast for the 21st Century" and his very interesting thoughts on Russia's future.  
George Friedman on World War III

Is russia starting to finance other countries with cheap loans ,like USSR did ?

MOSCOW (Reuters) - Russian treasury at the current high oil prices before 2020 are missing about 10 trillion rubles of income to fund all budget commitments and promises of the authorities and of the risk reduction in revenues, the gap may be even more to be of long-term fiscal strategy Ministry of Finance.

Pension obligations of the budget, the probable drop in revenues from exports, falling tax revenues and the reserve fund under the conditions of increasing social and military spending even more risk rasbalansirovat budget system. As prescription Finance Ministry proposes to cut costs and think about increasing taxes on the commodity sector. Otherwise, you must either raise other taxes or abolish fiscal rule and increase rapidly goszaimstvovany.

In the period from 2017 to 2020-th - acting on the horizon or the promised government programs, but outside of the approved three-year budget - the Ministry of Finance found not secured obligations treasury income: 5.6 trillion rubles - approved and another 4.2 trillion - promised.

Preparation of the strategy up to 2030, which the Finance Ministry this week brings the government, held in conditions of economic stagnation and persistent demands of President Vladimir Putin to find money for the fulfillment of all promises without loosening fiscal policy.

WILL RAISE TAXES

The basis of the budgetary strategy laid conservative scenario of long-term macroeconomic forecast of Economic Development, under which the average rate of growth of the Russian economy before 2030 will not exceed 2.5 percent. At the same time, says the Ministry of Finance, there are still risks that even such growth will not be achieved and the budget revenues, which are down to 2030 to 14.8 percent of GDP from 19.1 percent of GDP in 2013, will be even less than planned ministry.

"The projected decline in revenue budget system, including the federal budget, determines appropriate to consider the question of raising the tax burden on the resource sector of the economy, in general, stable tax burden on other sectors of the economy, as well as ensuring the growth of non-tax revenues," - said in a strategy.

Reduce the proportion of the working population carries its risks.

"Forming conditions for continuous improvement of expenditure obligations of the Pension Fund and, as a consequence, growth needs for budgetary transfers from the federal budget, or increasing the load on the wage fund."

Costs for a balanced budget of the Pension Fund in accordance with the strategy of growing up to 2.0 trillion rubles to 943 billion rubles in 2013, cutting a percentage of GDP to 1.0 from 1.4 percent.

At the same time the Ministry of Finance has warned that if the measures aimed at ensuring the long-term balance of the pension system will not be accepted, the budgetary transfers to balance the budget, the FIU may increase to 3 percent of GDP per year.

"Given the increase in long-term deficit-budget funds, the growth of demand in the financial support of the health system, as well as the socio-economic situation, may be considered to clarify the dimensions of social insurance contributions."

INCREASE DEBT

Strategy assumes that the budget deficit will be the expected period, and the deficit - covered mainly due to government bonds, which will be virtually the sole source of its funding. As a result, the national debt will rise to 18.2 percent of GDP by 2030 - the Ministry of Finance at a certain maximum bracket of 20 percent of GDP - from 12.0 percent of GDP in 2013.

"When you save recorded in the forecast revenues from privatization and other sources of deficit financing public debt by 2030 may reach the threshold, even in the context of sustainable GDP growth and rising oil prices. In this case, may be subject to more stringent restrictions limit the scope of the federal budget the reduction of "design deficiency".

Expenditure Ministry of Finance considered on the basis of "fiscal rule" that limits spending a certain oil price, and tried to lay all the approved commitments and orders of the president and the government.

Given the transition in 2014 to the "program budget" Finance Ministry had based the basic version of government programs (government approved last year 39 state programs in two versions - basic / budget / and optimistic) and found that even in this case, the treasury is not enough 2017 -2020 years 5.6 trillion rubles.

"In terms of the forecast period in order to balance the federal budget in 2017 ... need trimming costs 1.247 trillion rubles, in 2018 - 1.655 trillion rubles, in 2019 - 1.517 trillion rubles in 2020 and 1.142 trillion rubles," - said document.

With the additional orders of the president and the government of the federal targeted programs, as well as costs associated with the reform of the pension system, "hole" may increase by another 4.2 trillion rubles in 2017-2020 years, says the Ministry of Finance.

Furthermore, the authors warn the strategy of the downside risks of non-oil revenues - tax and customs payments, revenues from privatization. Thus, according to tax and customs services, the amount of revenue shortfalls could reach in 2014 338 billion rubles in 2015 and 2016 - 562 and 792 billion rubles, respectively, leads the Finance Ministry figures.

At the same time the Ministry of Finance laid in strategy means selling "May decrees" Putin, who estimated at 5.3 trillion rubles by 2018.

If the oil is cheaper

The Ministry of Finance also made calculations of the three scenarios fall in oil prices in 2016: short-term decline to $ 60 per barrel to $ 80 per barrel, with a gradual recovery within two to three years, long-term decline to $ 80 per barrel.

If oil prices fall obligations laid down in the strategy in case of continued fiscal rule and the rejection of unfunded costs will be financed by income, says Finance Ministry but at the expense of the Reserve Fund.

In the case of long-term decline in oil prices the Reserve Fund will be exhausted in 2016 and the authorities in the second year would have to reduce budgeted expenses, the Finance Ministry warns.

At the same time the Reserve Fund Russia may lose without falling oil prices.

"Even if the oil price will be the same, we have big risks on income. Taxes, customs, privatization, plus can be warranties, including, at the Olympic venues. If we add up all this, it turns out that there is no reserve fund in 2016, "- said a source in the government.

Last year, the Finance Ministry has softened fiscal rule amending the Budget Code, allow the use of the Reserve Fund in the event of loss of the planned revenues.

(Editor Alex Kalmyikov)

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?

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.

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.

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.