Russian Economy General News: #4

Is Siberia not considered part of Asia Russia. If they dont add in Siberia, then that explains it. Far east will be either natural resource, farming, and shipping based. Yet they managed to get automanufacturing their.

The future for those regions imo are internet based. Software developing. Either that or continue what they are doing.....

ExBeobachter1987 wrote:
Asian Russia can offer neither a large market nor low-cost labour to the Asian countries.
Natural resources are the main reason for them to invest in this part of Russia and it would be very hard to change that.

It's a bit strange to just look at Far Eastern Russia in isolation....they would have the whole Russian market at their disposal

sepheronx wrote:And then I posted the article afterwards how a French clothing company hired a siberian textile plant to make their line of clothing? Well, let us add to that and how Media plays a lot of BS sensationalism:

Large clothing manufacturers are starting to carry orders from China to Russian factories.

That's good news.

And yes, there seems to be plenty of ignoramuses (who actually believe they're smart) posting a lot of crap on Russian forums and blogs

Russia's budget deficit will amount to 3.7 percent of GDP

Amendments to the budget of 2015 suggest a deficit of 2.68 trillion rubles, or 3.7 percent of GDP. Such data are contained in the draft amendments to the State Duma, reports Tass . Revenues for the new version will amount to 12.54 trillion rubles, expenses - 15.22 trillion.

The previous version of the implied slightly higher deficit. This is due to the growth of revenues, which, according to a new assessment will be 85 billion rubles.

Oil and gas revenues for the new version will amount to 5.69 trillion rubles, and non-oil - about 6.85 trillion rubles. The net attraction of domestic loans in 2015 will amount to 180 billion rubles. Will be attracted 1.08 trillion and 820 billion rubles - extinguished.

Expenditure Reserve Fund, according to the updated draft amendments constitute 3.074 trillion rubles to 3.67 trillion rubles in the previous version. The fund by the end of 2015 is now estimated at 2,629 trillion rubles against 1.677 trillion rubles earlier.

Kudrin called for raising taxes or the retirement age

Russia's economy must choose between raising the retirement age and increase taxes. This was stated by former Finance Minister, head of the Committee of Civil Initiatives Alexei Kudrin, reports Tass .

"If we do not raise the retirement age, you will inevitably be faced with higher taxes" - he said. Kudrin said that Russia entered the unfavorable period: the number of working-age population is reduced, fewer taxpayers and retirees - more.

"It follows a number of serious findings that are associated with the pension system and the health care system and social security, as all they will experience serious difficulties and create new risks for the Russian economy," - said the former head of the Ministry of Finance.

He added that it is extremely important to maintain the incentive of the population to pension savings. Rejection of the funded system - "shot itself in the foot," he said. Kudrin said that all the new economic model of the Russian Federation was based on investment growth. Now, with the closure of foreign markets, pension funds are an important investment resources.

Earlier, on March 4, Prime Minister Dmitry Medvedev said that the government is not going to introduce new taxes or raise existing ones.

January 29 Minister of Economic Development Alexei Ulyukayev said that he considered it possible to return to a discussion about raising the retirement age. Later, Russian President Vladimir Putin proposed to study the matter in question. Now Russian women can retire at 55 years, men - 60.

Austin wrote:Kudrin called for raising taxes or the retirement age

Russia's economy must choose between raising the retirement age and increase taxes. This was stated by former Finance Minister, head of the Committee of Civil Initiatives Alexei Kudrin, reports Tass .

"If we do not raise the retirement age, you will inevitably be faced with higher taxes" - he said. Kudrin said that Russia entered the unfavorable period: the number of working-age population is reduced, fewer taxpayers and retirees - more.

"It follows a number of serious findings that are associated with the pension system and the health care system and social security, as all they will experience serious difficulties and create new risks for the Russian economy," - said the former head of the Ministry of Finance.

He added that it is extremely important to maintain the incentive of the population to pension savings. Rejection of the funded system - "shot itself in the foot," he said. Kudrin said that all the new economic model of the Russian Federation was based on investment growth. Now, with the closure of foreign markets, pension funds are an important investment resources.

Earlier, on March 4, Prime Minister Dmitry Medvedev said that the government is not going to introduce new taxes or raise existing ones.

January 29 Minister of Economic Development Alexei Ulyukayev said that he considered it possible to return to a discussion about raising the retirement age. Later, Russian President Vladimir Putin proposed to study the matter in question. Now Russian women can retire at 55 years, men - 60.

So make it 65 (soon to be 67) like in Canada. The flat tax rate of 14% is very low, especially for a country that has public medical care, subsidized education and other such public support.

Austin wrote:Russia's budget deficit will amount to 3.7 percent of GDP

Amendments to the budget of 2015 suggest a deficit of 2.68 trillion rubles, or 3.7 percent of GDP. Such data are contained in the draft amendments to the State Duma, reports Tass . Revenues for the new version will amount to 12.54 trillion rubles, expenses - 15.22 trillion.

The previous version of the implied slightly higher deficit. This is due to the growth of revenues, which, according to a new assessment will be 85 billion rubles.

Oil and gas revenues for the new version will amount to 5.69 trillion rubles, and non-oil - about 6.85 trillion rubles. The net attraction of domestic loans in 2015 will amount to 180 billion rubles. Will be attracted 1.08 trillion and 820 billion rubles - extinguished.

Expenditure Reserve Fund, according to the updated draft amendments constitute 3.074 trillion rubles to 3.67 trillion rubles in the previous version. The fund by the end of 2015 is now estimated at 2,629 trillion rubles against 1.677 trillion rubles earlier.

This will change as the year goes on (they should do more calculations near end of year) as trade balance adjustment. I imagine Russia will still end up with a decent surplus and just bank that money while still holding debt.

sepheronx wrote:

Austin wrote:Russia's budget deficit will amount to 3.7 percent of GDP

Amendments to the budget of 2015 suggest a deficit of 2.68 trillion rubles, or 3.7 percent of GDP. Such data are contained in the draft amendments to the State Duma, reports Tass . Revenues for the new version will amount to 12.54 trillion rubles, expenses - 15.22 trillion.

The previous version of the implied slightly higher deficit. This is due to the growth of revenues, which, according to a new assessment will be 85 billion rubles.

Oil and gas revenues for the new version will amount to 5.69 trillion rubles, and non-oil - about 6.85 trillion rubles. The net attraction of domestic loans in 2015 will amount to 180 billion rubles. Will be attracted 1.08 trillion and 820 billion rubles - extinguished.

Expenditure Reserve Fund, according to the updated draft amendments constitute 3.074 trillion rubles to 3.67 trillion rubles in the previous version. The fund by the end of 2015 is now estimated at 2,629 trillion rubles against 1.677 trillion rubles earlier.

This will change as the year goes on (they should do more calculations near end of year) as trade balance adjustment. I imagine Russia will still end up with a decent surplus and just bank that money while still holding debt.

In other news, whats your thoughts about Russia being kicked out of SWIFT, only for Russia to be brought on to the board of SWIFT? To me this reduced me to tears and hysterical laughter...

Russia gets seat on SWIFT board

...Merkel and Obama just got served a massive piece of humble pie...Russia just got significantly more influential in European finance lol!

Austin wrote:Russia's budget deficit will amount to 3.7 percent of GDP

Amendments to the budget of 2015 suggest a deficit of 2.68 trillion rubles, or 3.7 percent of GDP. Such data are contained in the draft amendments to the State Duma, reports Tass . Revenues for the new version will amount to 12.54 trillion rubles, expenses - 15.22 trillion.

The previous version of the implied slightly higher deficit. This is due to the growth of revenues, which, according to a new assessment will be 85 billion rubles.

Oil and gas revenues for the new version will amount to 5.69 trillion rubles, and non-oil - about 6.85 trillion rubles. The net attraction of domestic loans in 2015 will amount to 180 billion rubles. Will be attracted 1.08 trillion and 820 billion rubles - extinguished.

Expenditure Reserve Fund, according to the updated draft amendments constitute 3.074 trillion rubles to 3.67 trillion rubles in the previous version. The fund by the end of 2015 is now estimated at 2,629 trillion rubles against 1.677 trillion rubles earlier.

3.7% is $44.7 billion. Russia is paying $65 billion less in terms of foreign loan interest and principal payments in 2015.

The shortfall is 2.68/12.54 or 21.4%.

Compare with Canada's deficits:

http://www.cbc.ca/news2/interactives/canada-deficit/

The shortfall in 2009 was 55.6/218.6 or 25.4%.

I don't recall the "end is nigh" BS coverage of Canada in 2009 or 2010.

The more relevant information is the inflation rate. It is back to its early 2014 levels, before the sanctions and oil price drop.

http://www.gks.ru/bgd/free/B04_03/IssWWW.exe/Stg/d05/49ozen18.htm

For the latest week it is still holding at 0.2%. This is for three weeks in a row now.

sepheronx wrote:

This will change as the year goes on (they should do more calculations near end of year) as trade balance adjustment. I imagine Russia will still end up with a decent surplus and just bank that money while still holding debt.

Your point is key. The shock is at its peak now. It will ameliorate since the economy has many adjustment processes and is
not some clockwork mechanism which fails because a cog breaks.

Economic ministry: Only General Motors to leave Russian market

Earlier on Wednesday, GM said it halts industrial assembly at its car plant in the city of St. Petersburg and will fully shut it down at the end of June wrote:

http://www.1prime.biz/news/transport_automobile/_Economic_ministry_Only_General_Motors_to_leave_Russian_market/0/%7BD736E59C-DA0F-4ACA-8B55-8F1142C5497F%7D.uif

Putin’s spokesman: GM to lose Russian market when it soars

General Motors (GM), which plans to leave Russia, will lose the market by the time when it recovers, Dmitry Peskov, spokesman for President Vladimir Putin, told reporters Thursday. wrote:

http://www.1prime.biz/news/transport_automobile/_Putins_spokesman_GM_to_lose_Russian_market_when_it_soars/0/%7BE811EB07-6BFF-4793-BC45-3CC92B412158%7D.uif

I laughed so hard.

Where is Flayming Python.?
Do you remember we had this discussion  a few weeks ago?
Hurting the US auto automakers without applying sanctions!!!

GM Opel sales were very low in Russia rven if last year people went crazy and started buying foreign cars when ruble went down. GM will be in Russia anyways making Chevrolet Niva and other crap.
This year on september Lada will be presenting new family of cars. Lada Vesta. It looks promising, finally propet C segment car as I always whined that Russians are ignoring this market. They are working on sporty engine too. So this year there will be cooldown in foreign carsales so Lada is comming right on time.

After they and ford leaves, start changing auto and mortgage loan structures to allow auto dealers to give at their rates (ehich are always deflated) as well increase recycling program, so it gets more autosale potential and both ford and gm will see their losses.

Regular wrote:GM Opel sales were very low in Russia rven if last year people went crazy and started buying foreign cars when ruble went down. GM will be in Russia anyways making Chevrolet Niva and other crap.
This year on september Lada will be presenting new family of cars. Lada Vesta. It looks promising, finally propet C segment car as I always whined that Russians are ignoring this market. They are working on sporty engine too. So this year there will be cooldown in foreign carsales so Lada is comming right on time.

Any links on the new engine? Would like to know more.

magnumcromagnon wrote:

sepheronx wrote:

Austin wrote:Russia's budget deficit will amount to 3.7 percent of GDP

Amendments to the budget of 2015 suggest a deficit of 2.68 trillion rubles, or 3.7 percent of GDP. Such data are contained in the draft amendments to the State Duma, reports Tass . Revenues for the new version will amount to 12.54 trillion rubles, expenses - 15.22 trillion.

The previous version of the implied slightly higher deficit. This is due to the growth of revenues, which, according to a new assessment will be 85 billion rubles.

Oil and gas revenues for the new version will amount to 5.69 trillion rubles, and non-oil - about 6.85 trillion rubles. The net attraction of domestic loans in 2015 will amount to 180 billion rubles. Will be attracted 1.08 trillion and 820 billion rubles - extinguished.

Expenditure Reserve Fund, according to the updated draft amendments constitute 3.074 trillion rubles to 3.67 trillion rubles in the previous version. The fund by the end of 2015 is now estimated at 2,629 trillion rubles against 1.677 trillion rubles earlier.

This will change as the year goes on (they should do more calculations near end of year) as trade balance adjustment. I imagine Russia will still end up with a decent surplus and just bank that money while still holding debt.

In other news, whats your thoughts about Russia being kicked out of SWIFT, only for Russia to be brought on to the board of SWIFT? To me this reduced me to tears and hysterical laughter...

Russia gets seat on SWIFT board

...Merkel and Obama just got served a massive piece of humble pie...Russia just got significantly more influential in European finance lol!

So no one cares about this monumental piece of news lol?

Russia and China should develop a SWIFT alternative. This seat is nothing more than a pathetic attempt to try and stop an
alternative transaction process from being active.

Agree.

kvs wrote:Russia and China should develop a SWIFT alternative.   This seat is nothing more than a pathetic attempt to try and stop an
alternative transaction process from being active.

No 'should' it's 'already' in the process of creating an alternative SWIFT with China. I agree with what your saying, but I think you missed my point here. My main point that I was making was that despite claims from Western leaders about Russian participation of SWIFT, that they will unilaterally 'kick' Russia out, in reality they were forced to admit Russia is a vital and crucial part of the EU financial sector. Russia went from having less power in SWIFT, to being kicked out, then brought back with more power and even being on the board of SWIFT.

To put this in perspective: it's the financial equivalent of the Debaltsevo 'Cauldron', one of the biggest pieces of 'humble pie' fell in the lap of the EU financial leaders. When Russia threatened to unilaterally cut ties with the SWIFT, SWIFT was forced to bring Russia back and even give them a chair on the board. The EU just 'shitted' on themsevles...they basically admitted that if Russian banks stop doing business in the EU, it would cause untold havoc of the EU financial sector...

I don't bite this sudden love mentality. European elites invested too much in the current status quo to let it sleep so easily.

http://trueeconomics.blogspot.ca/2015/03/18315-russian-deposits-dollarisation.html

In 2014, Russian residents directly withdrew USD28.6 billion in forex from the banks. A large figure, but significantly less than in 2008 when this figure stood at USD51.4 billion. Over 2014, Russian banking system lost, in total, USD40 billion of forex to cash conversions and deposits withdrawals - all of which was registered as capital outflow from Russia.

So $40 billion of the "capital flight" from Russian in 2014 wasn't even actual capital flight. Add to this the fact that a huge chunk
of the rest of the capital flight was Russian companies engaging in their usual offshore transaction activity, and then there is
nothing to talk about.

New contract with China for Natural Gas .. of another 30 Billions cubic meters per year..
possibly will be signed in may victory parade.

the 5th column media.. i know.. but lazy to seek the same info from a different source.

http://rbth.com/business/2015/03/19/new_gas_contract_with_china_could_be_signed_on_may_9_44605.html

That would be what, 4 agreements then? Wow. China will really go for it all. Can't say I blame them.

kvs wrote:http://trueeconomics.blogspot.ca/2015/03/18315-russian-deposits-dollarisation.html

In 2014, Russian residents directly withdrew USD28.6 billion in forex from the banks. A large figure, but significantly less than in 2008 when this figure stood at USD51.4 billion. Over 2014, Russian banking system lost, in total, USD40 billion of forex to cash conversions and deposits withdrawals - all of which was registered as capital outflow from Russia.

So $40 billion of the "capital flight" from Russian in 2014 wasn't even actual capital flight.   Add to this the fact that a huge chunk
of the rest of the capital flight was Russian companies engaging in their usual offshore transaction activity, and then there is
nothing to talk about.  

IF they stop capital account convertibility they can stop Russian Resident buying USD or Euro beyond what is absolutely needed like how we have in India. , We just cannot go and buy USD for Rupee beyond few thousand USD and that too we need to provide proof like if you are travelling you need to show Visa/Ticket or if you plan to study abroad then appropriate proof to banks who then give you USD on case by case basis.

This stupidity of Russian citizin buing USD/Euro by just selling Rouble would hurt russia badly even in good times forget about bad times as they are facing now.

No country in BRICS or many countries have such facility barring West where they just need to print those USD/Euro

Vann7 wrote:

New contract with China for Natural Gas .. of another 30 Billions cubic meters per year..
possibly will be signed in may victory parade.

the 5th column media.. i know.. but lazy to seek the same info from a different source.

http://rbth.com/business/2015/03/19/new_gas_contract_with_china_could_be_signed_on_may_9_44605.html

Russia needs to sell its Energy products to China in RMB in return for greater share of its energy market.

Then convert those RMB to USD/Euro or Gold or keep it RMB depending in its need.

Currency union accelerated by approx. 10 years ....


Putin proposes currency union with Belarus, Kazakhstan