Russian Economy General News: #4

Cyberspec wrote:A similar article from investment adviser Mike Shedlock...

Russia Forced to Do Right Thing? Buy Russia?
Read more at http://globaleconomicanalysis.blogspot.com/2015/04/russia-forced-to-do-right-thing-buy.html#QIvgyotqs4oYItzD.99


And a commentary related to the Newsweek article...

Is Russia's "Bullet Proof" Economy Ready to Blast Off?
http://russia-insider.com/en/mainstream-cracked-russias-bullet-proof-economy/5626

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The main surprise is the Rus economy actually growing instead of receding. I have a feeling the forecasts for 3,4 or 5% drop in GDP for 2015 might be well off the mark. The first quarter of 2015 should've been the worst IMO

Austin wrote:Some tough decision expected in 2016-2018 budget warns Finance Minister

Siluanov: Russia must prepare for a period of low oil prices

ote]
MOSCOW, April 14. / TASS /. Russia must prepare for a period of low oil prices, said at the expanded board of the Ministry of Finance Minister Anton Siluanov head.

"Experience has shown that low levels of prices can be kept for quite a long time. And we need to prepare for just such a period," - he said.

Without accumulation of oil and gas reserves this year would have to cut spending budget of the Russian Federation by 25%, said Siluanov.

"The policy of the last decade on the accumulation of surplus oil revenues allowed at the beginning of this year have in the Reserve Fund 5 trillion rubles. Without the reserves this year would have to cut spending by 25%," - he said.

Siluanov added that limit spending in the budget rules also brought results.

"If we had more actively increasing budget expenditures, as suggested by our opponents (which, incidentally, and so for 10 years increased from 16 to 21% of GDP), at the present time and we would have a debt under 30% of GDP and the budget deficit 6-7% of GDP, and the recession in the economy would start much earlier, "- said the Minister.

Among other measures, which have helped the budget system to resist external challenges, Siluanov also noted that in the second half of last year the government began to implement the first steps to optimize the budget.

By the end of 2014 managed to accumulate in the anti-crisis fund of more than 130 billion rubles (taking into account the funds accumulated since the beginning of the year, this amount now stands at 234 billion rubles); carried out measures to optimize the cost of more than $ 1 trillion rubles, reminded the Minister.

"It is thanks to this timely decision to form the stock of resources, which made it possible to implement a plan of priority measures to ensure the sustainable economic development and social stability", - said the head of the Ministry of Finance.

He also said that the government "responded quickly to the deteriorating situation in the banking system" running the recapitalization of the banking system by 1 trillion rubles, as well as increasing the maximum amount of insured deposits to 1.4 million rubles.

How to optimize budget spending

The Ministry of Finance considers it necessary to minimize the crisis support employment in 2016-2017 as one of the five important measures to optimize budget expenditures.

"What are the key areas of cost optimization can be distinguished? Firstly, the folding of single anti-crisis measures this year, primarily in terms of supporting employment. Secondly, optimization of costs and the size of the state apparatus" - listed Siluanov. Among the proposed measures it is also called - continued formation of spending on defense and security on the basis of the priorities of the country's defense and the real possibilities of the budget; reduction in the budget of the so-called psevdoinvestitsionnyh costs, as well as grants and contributions to the company's share capital; reduction in social spending.

According Siluanova, the largest share in the structure of the consolidated budget expenditures are expenses of a social nature. "Apart from the cost, there is also a large range of benefits of a different nature. The effectiveness of the system of social support remains low: does not apply the principle of means-tested pension benefits ceased to be fees associated with disability person, and actually began to play the role of the social benefit of a certain age" - the minister said.

He stressed that all this led to the formation of high and low effect commitments to overcome poverty.

On the Budget

According Siluanova, a new three-year budget (for 2016 and the planning period of 2017 and 2018 - Ed.) Must run structural changes in the economy.

"The task of the Ministry for this year - preparation of a new three-year budget, which should start the necessary structural changes in the economy. It is important to reduce the operating costs of the budget, leaving as many resources in the private sector. The budget can not replace the private investor and the state can not replace private owner. Solving these problems will help return the budget to the deficit-free (in 2017), "- he said.

According Siluanova, the ministry task is to reduce the $ 2 trillion in the budget-2017. "In the coming months to be a large-scale work on the optimization of the budget: we will have to cut about 2 trillion rubles from the planned expenditure for 2017. The volume of spending cuts will exceed the original level conditionally approved expenditures," - said the head of the Ministry of Finance.

As explained to journalists yesterday First Deputy Finance Minister Tatyana Nesterenko, the Ministry of Finance has already started work on a new three-year budget, which is considering the possibility of changing the rules of the budget due to the dynamics of oil prices.

Siluanov also noted that the use of reserve funds as a source of budget deficit should be reduced dramatically in 2016.

"In the baseline scenario, the Reserve Fund" lose weight "to 3.1 trillion rubles, or nearly two-thirds. When you save the current settings of the course and the cost of oil by the end of the volume of the Reserve Fund may be reduced to 1.5 trillion rubles. All this means that next year we need to drastically reduce the use of this source of financing of the budget, "- said the minister.

Economic growth

According Siluanova, the first quarter will be the weakest economic growth in Russia.

The Finance Ministry expects the II quarter outflows of $ 15 billion, a year - no more than $ 90 billion.

"We see a sharp slowdown in the outflow of capital - with a level of $ 77.4 billion in the fourth quarter of last year, it dropped to $ 32.6 billion in the first quarter of 2015. In the second quarter, we expect to reduce it to a level of $ 15 billion, and in general, he is unlikely to exceed $ 90 billion, "- he said.

The Bank of Russia expects capital outflows in the current year at $ 110 billion. In 2014 the CBR registered a record outflow of capital, which exceeded $ 150 billion.

The Ministry of Finance does not preclude recovery of economic growth in Russia in the second half of 2015. According to the forecast of the RF Ministry of Economic Development, at the end of 2015 Russia's GDP could fall by 2.5%, while next year growth is possible, with an average growth in the years 2016-2018 could reach 2.5-3%.

Restarting economic growth in Russia is possible only through private investment, said Siluanov.

What you need to restart economic growth? The answer is clear - private investment. No economy is developing rapidly, as if eats produced income. All fast-growing economies of many save and invest Anton Siluanov

According to him, in the structure of domestic demand, Singapore's gross is 38.1%, China - 49.3%, South Korea - 29% in Indonesia - 33.6%, India - 30.0% and the current consumption the state in these countries is only from 9 to 14% of GDP.

"We will not invest today about 19-20% of GDP, and thus to grow by 3-4% is possible. In the structure of domestic demand, investment should be around 30% None of the countries, which sharply increased its current consumption and government spending, not ensure sustainable long-term growth, "- said Siluanov.

Russian ruble and government securities - one of the most profitable assets this year, the minister said. "What we see today? Financial markets have stabilized, and the Russian ruble government securities are among the most profitable assets this year," - said Siluanov.

According to him, the first impact of the crisis on the financial markets is necessary, and then transferred to the effect on the real economy. Restoration is now in the same way, the minister added.

Inflation

Finance Ministry expects inflation in Russia by the end of 2015, 11%. Siluanov previously expressed the view that inflation this year will be lower than the official forecast of 12.2%. "At the end of the year is expected to reduce inflation to the level of 11% Gradually, more and more economists begins to join our estimates," - he said.

According Siluanova, the current inflation rate of 16.9% YoY due to one-off factors.

"Not yet resolved the issue with high inflation. The current 16.9% yoy mainly due to one-off factors: the effect of the depreciation of the real effective exchange rate and trade restrictions, which together gave more than 11 percentage points The main risk - not to let go of inflation from a single into a permanent "- the minister said.

He explained that this transition occurs when following the surge in prices starts indexing budget expenditures and salaries. "A key role in reducing inflation today belongs to the fiscal policy" - he said.

The Finance Ministry expect the emergence of private bonds indexed to inflation. "In the second quarter of 2015, we will offer the market denominated bonds, indexed to inflation. De facto, we create a new market - expect after us such bonds to finance long-term investment projects will produce and Russian companies," - he said.


On pension reform

The question of raising the retirement age need to be addressed urgently, says Siluanov. "We need to modernize the system of categorical benefits, means-tested allowance to enter in the implementation of measures of social support. We need to urgently address the question of the abolition of early retirement pensions, raising the retirement age. This will not only reduce the burden on the budget, but also to mitigate the impact of demographics on the weak economically active population" , - he said.

The Ministry of Finance considers it necessary restoration funded pension in 2016 in full.

"The key question - the full restoration in 2016 the rights of the insured persons on the funded pensions in accordance with their choice," - he said.

Siluanov reminded that this system was the need to reform and verification mechanism was launched on state guarantees of savings. "This year, funds received accumulation of the past, you are ready to restart next year," - said the minister.

According to the Finance Minister, the final decision should be taken at a meeting in the government.

Against the return of mandatory funded pension serves a social bloc of the government, which proposes to make a voluntary retirement format.

Loan for regions

Russia's Finance Ministry will provide new loans to the region only in the performance of their obligations under previous loans, said Anton Siluanov.

He noted that due to the high volatility in the financial markets very sharply at the beginning of the year there was a question refinancing regions.

"It was decided to lean on - to refinance commercial debt will be allocated 160 billion rubles of budget credits at the rate of 0.1%," - said Siluanov.

However, lamented the minister, the conditions for preparing these budget loans provided in the past year, "unfortunately, not fulfilled all the regions."

"This year we will give serious consideration to the monitoring of those agreements (to provide budgetary credits - approx. Ed.), Which will be concluded and new lending regions will be linked to the implementation of earlier agreements on loans," - said the Minister.

Austin wrote:

Austin wrote:Some tough decision expected in 2016-2018 budget warns Finance Minister

Siluanov: Russia must prepare for a period of low oil prices

ote]
MOSCOW, April 14. / TASS /. Russia must prepare for a period of low oil prices, said at the expanded board of the Ministry of Finance Minister Anton Siluanov head.

"Experience has shown that low levels of prices can be kept for quite a long time. And we need to prepare for just such a period," - he said.

Without accumulation of oil and gas reserves this year would have to cut spending budget of the Russian Federation by 25%, said Siluanov.

"The policy of the last decade on the accumulation of surplus oil revenues allowed at the beginning of this year have in the Reserve Fund 5 trillion rubles. Without the reserves this year would have to cut spending by 25%," - he said.

Siluanov added that limit spending in the budget rules also brought results.

"If we had more actively increasing budget expenditures, as suggested by our opponents (which, incidentally, and so for 10 years increased from 16 to 21% of GDP), at the present time and we would have a debt under 30% of GDP and the budget deficit 6-7% of GDP, and the recession in the economy would start much earlier, "- said the Minister.

Among other measures, which have helped the budget system to resist external challenges, Siluanov also noted that in the second half of last year the government began to implement the first steps to optimize the budget.

By the end of 2014 managed to accumulate in the anti-crisis fund of more than 130 billion rubles (taking into account the funds accumulated since the beginning of the year, this amount now stands at 234 billion rubles); carried out measures to optimize the cost of more than $ 1 trillion rubles, reminded the Minister.

"It is thanks to this timely decision to form the stock of resources, which made it possible to implement a plan of priority measures to ensure the sustainable economic development and social stability", - said the head of the Ministry of Finance.

He also said that the government "responded quickly to the deteriorating situation in the banking system" running the recapitalization of the banking system by 1 trillion rubles, as well as increasing the maximum amount of insured deposits to 1.4 million rubles.

How to optimize budget spending

The Ministry of Finance considers it necessary to minimize the crisis support employment in 2016-2017 as one of the five important measures to optimize budget expenditures.

"What are the key areas of cost optimization can be distinguished? Firstly, the folding of single anti-crisis measures this year, primarily in terms of supporting employment. Secondly, optimization of costs and the size of the state apparatus" - listed Siluanov. Among the proposed measures it is also called - continued formation of spending on defense and security on the basis of the priorities of the country's defense and the real possibilities of the budget; reduction in the budget of the so-called psevdoinvestitsionnyh costs, as well as grants and contributions to the company's share capital; reduction in social spending.

According Siluanova, the largest share in the structure of the consolidated budget expenditures are expenses of a social nature. "Apart from the cost, there is also a large range of benefits of a different nature. The effectiveness of the system of social support remains low: does not apply the principle of means-tested pension benefits ceased to be fees associated with disability person, and actually began to play the role of the social benefit of a certain age" - the minister said.

He stressed that all this led to the formation of high and low effect commitments to overcome poverty.

On the Budget

According Siluanova, a new three-year budget (for 2016 and the planning period of 2017 and 2018 - Ed.) Must run structural changes in the economy.

"The task of the Ministry for this year - preparation of a new three-year budget, which should start the necessary structural changes in the economy. It is important to reduce the operating costs of the budget, leaving as many resources in the private sector. The budget can not replace the private investor and the state can not replace private owner. Solving these problems will help return the budget to the deficit-free (in 2017), "- he said.

According Siluanova, the ministry task is to reduce the $ 2 trillion in the budget-2017. "In the coming months to be a large-scale work on the optimization of the budget: we will have to cut about 2 trillion rubles from the planned expenditure for 2017. The volume of spending cuts will exceed the original level conditionally approved expenditures," - said the head of the Ministry of Finance.

As explained to journalists yesterday First Deputy Finance Minister Tatyana Nesterenko, the Ministry of Finance has already started work on a new three-year budget, which is considering the possibility of changing the rules of the budget due to the dynamics of oil prices.

Siluanov also noted that the use of reserve funds as a source of budget deficit should be reduced dramatically in 2016.

"In the baseline scenario, the Reserve Fund" lose weight "to 3.1 trillion rubles, or nearly two-thirds. When you save the current settings of the course and the cost of oil by the end of the volume of the Reserve Fund may be reduced to 1.5 trillion rubles. All this means that next year we need to drastically reduce the use of this source of financing of the budget, "- said the minister.

Economic growth

According Siluanova, the first quarter will be the weakest economic growth in Russia.

The Finance Ministry expects the II quarter outflows of $ 15 billion, a year - no more than $ 90 billion.

"We see a sharp slowdown in the outflow of capital - with a level of $ 77.4 billion in the fourth quarter of last year, it dropped to $ 32.6 billion in the first quarter of 2015. In the second quarter, we expect to reduce it to a level of $ 15 billion, and in general, he is unlikely to exceed $ 90 billion, "- he said.

The Bank of Russia expects capital outflows in the current year at $ 110 billion. In 2014 the CBR registered a record outflow of capital, which exceeded $ 150 billion.

The Ministry of Finance does not preclude recovery of economic growth in Russia in the second half of 2015. According to the forecast of the RF Ministry of Economic Development, at the end of 2015 Russia's GDP could fall by 2.5%, while next year growth is possible, with an average growth in the years 2016-2018 could reach 2.5-3%.

Restarting economic growth in Russia is possible only through private investment, said Siluanov.

What you need to restart economic growth? The answer is clear - private investment. No economy is developing rapidly, as if eats produced income. All fast-growing economies of many save and invest Anton Siluanov

According to him, in the structure of domestic demand, Singapore's gross is 38.1%, China - 49.3%, South Korea - 29% in Indonesia - 33.6%, India - 30.0% and the current consumption the state in these countries is only from 9 to 14% of GDP.

"We will not invest today about 19-20% of GDP, and thus to grow by 3-4% is possible. In the structure of domestic demand, investment should be around 30% None of the countries, which sharply increased its current consumption and government spending, not ensure sustainable long-term growth, "- said Siluanov.

Russian ruble and government securities - one of the most profitable assets this year, the minister said. "What we see today? Financial markets have stabilized, and the Russian ruble government securities are among the most profitable assets this year," - said Siluanov.

According to him, the first impact of the crisis on the financial markets is necessary, and then transferred to the effect on the real economy. Restoration is now in the same way, the minister added.

Inflation

Finance Ministry expects inflation in Russia by the end of 2015, 11%. Siluanov previously expressed the view that inflation this year will be lower than the official forecast of 12.2%. "At the end of the year is expected to reduce inflation to the level of 11% Gradually, more and more economists begins to join our estimates," - he said.

According Siluanova, the current inflation rate of 16.9% YoY due to one-off factors.

"Not yet resolved the issue with high inflation. The current 16.9% yoy mainly due to one-off factors: the effect of the depreciation of the real effective exchange rate and trade restrictions, which together gave more than 11 percentage points The main risk - not to let go of inflation from a single into a permanent "- the minister said.

He explained that this transition occurs when following the surge in prices starts indexing budget expenditures and salaries. "A key role in reducing inflation today belongs to the fiscal policy" - he said.

The Finance Ministry expect the emergence of private bonds indexed to inflation. "In the second quarter of 2015, we will offer the market denominated bonds, indexed to inflation. De facto, we create a new market - expect after us such bonds to finance long-term investment projects will produce and Russian companies," - he said.


On pension reform

The question of raising the retirement age need to be addressed urgently, says Siluanov. "We need to modernize the system of categorical benefits, means-tested allowance to enter in the implementation of measures of social support. We need to urgently address the question of the abolition of early retirement pensions, raising the retirement age. This will not only reduce the burden on the budget, but also to mitigate the impact of demographics on the weak economically active population" , - he said.

The Ministry of Finance considers it necessary restoration funded pension in 2016 in full.

"The key question - the full restoration in 2016 the rights of the insured persons on the funded pensions in accordance with their choice," - he said.

Siluanov reminded that this system was the need to reform and verification mechanism was launched on state guarantees of savings. "This year, funds received accumulation of the past, you are ready to restart next year," - said the minister.

According to the Finance Minister, the final decision should be taken at a meeting in the government.

Against the return of mandatory funded pension serves a social bloc of the government, which proposes to make a voluntary retirement format.

Loan for regions

Russia's Finance Ministry will provide new loans to the region only in the performance of their obligations under previous loans, said Anton Siluanov.

He noted that due to the high volatility in the financial markets very sharply at the beginning of the year there was a question refinancing regions.

"It was decided to lean on - to refinance commercial debt will be allocated 160 billion rubles of budget credits at the rate of 0.1%," - said Siluanov.

However, lamented the minister, the conditions for preparing these budget loans provided in the past year, "unfortunately, not fulfilled all the regions."

"This year we will give serious consideration to the monitoring of those agreements (to provide budgetary credits - approx. Ed.), Which will be concluded and new lending regions will be linked to the implementation of earlier agreements on loans," - said the Minister.

I am wondering how they will cut 2 trillion roubles from planned expenditure in 2017 budget.......looks to be Defence will take the big axe

Therefore, it does not come as a surprise to us that Russia is faring relatively well in the present situation, notwithstanding the sanctions and the halving of the oil price. We must agree that the Russian economy is certainly not “in tatters” as it was expected (and wished for in certain quarters).

Russia’s present economic problems are comparable with those that the European Union have been suffering for the last five years, with the difference that Russia is timely reacting to them and not drowning itself with debt while keeping the economy afloat. Also, Russia is not suffering from endemic mass unemployment as are most of the EU countries, nor has it passed the bill on to the poor by cutting social benefits as is being done in EU.

Ruble appreciation would not be welcome

A further appreciation of the ruble would be a most unwelcome event as the weaker ruble has been a boon for domestic production and has largely kept the country’s budget intact. The excessively high interest rates are luring speculative money to Russia which only serves to artificially strengthen the ruble and fuel stock market speculation. This will not do anything good for the real economy.

Instead of letting the ruble appreciate the Central Bank must use this window of opportunity to lower the interest rates so as to ensure that Russian corporations, entrepreneurs and domestic investors have access to lending with affordable interest rates.

Austin wrote:Read it in full

EU Struggling To Diversify Away From Russian Gas

Viktor wrote:What can now say Russian haters    


Annual inflation in Russia fell for the first time in 10 months

Dollar exchange rate fell below 50 rubles

The oil price exceeds $ 63 per barrel

assets of domestic banks reached 77 trillion, exceeding the GDP of the country, also the president of the Russian Federation

Russian President noted that the budget deficit acceptable, 3.7%.

"The portfolio of loans to the real sector of the economy has increased, but that is especially pleasant in general assets of domestic banks, the domestic banking system increased to 77 trillion for the first time exceeded the country's GDP," - Putin said, stressing that "it is a very good indicator of stability and reliability Russian banking system. "

During the "straight line", he noted that in the past year increased fertility and mortality decreased. There is also increasing the average life expectancy in Russia, Putin said.

max steel wrote:But this sudden appreciation will harm russian domestic industry which boomed due to sanctions even if europeans cancel sanctions russia should not to keep its domestic indstry strong .

“We’ve survived the peak of the problems. Russian banks and corporations have paid off their foreign currency debt,” Putin said.

“The ruble has strengthened so much there must be other [then oil - Ed.] factors,” the Russian president said.

"Raise the retirement age is theoretically correct, but you need to think about the people," - Putin said

“The state debt of the United States is already greater than the country’s GDP. This is a very worrying thing, this is a warning signal not only for the [United] States, but for the entire economy. We don’t know yet how the situation will develop."

"The Eurozone has a lot of problems, it is bursting at the seams. What will happen to these debtor countries whose debt stands at 174 percent of GDP, will the Eurozone leaders be able to handle those who lag behind? This is also unknown."

In 2014, banks and enterprises of Russia were ordered to pay $ 130 billion of credit resources, reminded the president of the Russian Federation

Viktor wrote:

max steel wrote:But this sudden appreciation will harm russian domestic industry which boomed due to sanctions even if europeans cancel sanctions russia should not to keep its domestic indstry strong .

Why would it? Russia introduced import substitution program

Now it does not matter Its a win win situation for Russia


carring on with Vladimir Putin highlights   

link

“We’ve survived the peak of the problems. Russian banks and corporations have paid off their foreign currency debt,” Putin said.

“The ruble has strengthened so much there must be other [then oil - Ed.] factors,” the Russian president said.

Russia Has Resources to Overcome Difficulties With Minimal Losses – Putin

Russian Economy May Recover in Less Than 2 Years – Putin


Putin: raise the retirement age would be correct

"Raise the retirement age is theoretically correct, but you need to think about the people," - Putin said

On US vassals
“Big superpowers which pretend to be exceptional and consider themselves the only center of power in the world do not need allies, they need vassals. I’m talking about the United States. Russia cannot exist in such a system of relations.”

On US repeating the USSR’s mistakes
“After World War II we tried to impose on many Eastern European nations our model of development and we did it through force. We must acknowledge that. There’s nothing good in it, it still affects us today… The Americans are doing something like that now, trying to impose their model on virtually the entire world. They will fail too.”

MOSCOW, April 16 - RIA Novosti / Prime. Russian banks, companies and federal authorities in 2016 must repay 85.2 billion dollars of foreign debts, including 67.1 billion of principal and about $ 18 billion per cent, follows from statistics published on the website of the Bank of Russia.

According to the Central Bank, in 2015 and 2016 the Russian Federation must repay 227.7 billion dollars of foreign debts.

Payments in 2016

In 2016, domestic banks have to pay 16.823 billion principal and 4.925 billion dollars in interest payments. Russian companies will have to pay 48.14 billion and 10.628 billion respectively.

Payment of general government external debt in 2016 in the aggregate amount to 4.663 billion dollars.

This year

This year, the Russian banks and companies have to pay 142.5 billion dollars of foreign debts, including 119.75 billion dollars of principal and interest 22.74 billion.

Domestic banks have to pay 40.4 billion dollars of principal and 6.54 billion dollars in interest payments. Russian companies will have to pay 77.2 billion dollars and 13.6 billion dollars respectively.

Payment of general government external debt in 2015 in the aggregate amount to 4.76 billion dollars. The Central Bank principal payments in the current year are not available, and as a percent of the regulator will have to pay just $ 4 million.

The maximum amount of foreign debt payments in 2016 will be in the second and fourth quarters. The peak of payments on debts already passed: According to the Central Bank, in December last year, Russian debtors to pay out a total of 32.912 billion dollars, and the total payments in the fourth quarter of 2014 amounted to 67.239 billion dollars.

As of January 1, 2015 the foreign debt Russian counterparts on an "on demand" was 33.136 billion dollars. Payment schedule has not been defined in relation to 28.531 billion dollars in debt, and the debt in the amount of 17.904 billion chart absent. In the latter category includes outstanding debt, preferred shares owned by non-residents and other non-repayment schedules.

The study reveals a range of impressive indicators on the development of the economy between 2000 and 2013 and the health of the Russian economy:

-The share of natural resources rents in GDP (oil, gas, coal, mineral, and forest rents) more than halved between 2000 to 2012 from 44.5% to 18.7%. The actual share of oil and gas was 16%.

-Russian industrial production has grown more than 50% while having undergone a total modernization at the same time.

-Production of food has grown by 100% in 2000 – 2013.

-Production of cars has more than doubled at the same time that all the production has been totally remodeled.

-Russian exports have grown by almost 400%, outdoing all major Western countries.

-Growth of exports of non-oil & gas goods has been 250%.

-Russia’s export growth has more than doubled compared with the competing Western powers.

-Oil & gas does not count for over 50% of state revenues as has been claimed, but only 27.4%.

-Top revenue source is instead payroll taxes.

-Russia’s total tax rate at 29.5% is among lowest of developed countries, non-oil & gas total tax rate is half that of the Western countries.

-Russia’s GDP has grown more than tenfold from 1999 to 2012.

-Public sector share of employment in Russia is not high in comparison with developed economies. State officials make up 17.7% of Russia’s total work force, which situates it in the middle of the pack with global economies.

-Russia’s labor productivity is not 40% of the Western standards as is frequently claimed, but rather about 80%.

-Far from “relying” on oil & gas, the Russian government is engaged in massive investments in all sectors of the economy, biggest investments going to aviation, shipbuilding, and manufacturing of high-value machinery and technological equipment.

We strongly believe that everyone benefits from knowing the true state of Russia’s economy, its real track record over the past decade, and its true potential. Having knowledge of the actual state of affairs is equally useful for the friends and foes of Russia, for investors, for the Russian population – and indeed for its government, which has not been very vocal in telling about the real progress. I think there is a great need for accurate data on Russia, especially among the leaders of its geopolitical foes. Correct data will help investors to make a profit.