Russian Economy General News: #5

Imports to Russia from non-SNG countries decreased 39% this year.

http://www.rt.com/business/316264-russia-imports-drop-data/

They need to decrease it even further and increase local consumption and production. They should outright stop buying chemicals and food from american allies.

sepheronx wrote:They need to decrease it even further and increase local consumption and production.  They should outright stop buying chemicals and food from american allies.

All in due time, shock therapy never works, remember Yeltsin?

Slow and steady wins the race.

PapaDragon wrote:

sepheronx wrote:They need to decrease it even further and increase local consumption and production.  They should outright stop buying chemicals and food from american allies.

All in due time, shock therapy never works, remember Yeltsin?

Slow and steady wins the race.

I completely agree.

Problem though isnt Russia itself or the authorities, but the industries. I was reading on tass that the major drop in manufacturing and industrial production in august has more to do with people now spending a lot less. And instead of dropping prices to encourage buyers, manufacturers instead increased prices saying their input costs are higher due to devaluation of the rouble. So instead of searching for cheaper and or local parts, they keep importing and jacking up prices but saying oh woe is me, because they cant sell.

Hopefully Russia lets those go bust and someine new jumps in.

US-Russia Cooperation in Syria May End EU Anti-Russian Sanctions

http://sputniknews.com/europe/20150923/1027405507/us-russia-cooperation-in-syria-may-end-eu-food-embargo.html#ixzz3mZTXSxrK

I am not in favor of ending EU Embargo especially since Russia has already started investing in import substitution programs, if the embargo is lifted soon then all efforts to make Russia independent from EU/US products and technologies will be lost. Then in future conflicts US/EU will have another leverage to use against Russia in situations like in Ukraine

Unemployment up 13% in August
http://tass.ru/en/economy/823160

A lot of playing with words but official average unemployment in Russia as of August is 5.3% which is quite low.

I also suppose if they do introduce the PMC law in coming months (if it does pass and it seems there are powerful people wanting it to), would bring down unemployment as well. Hopefully more import substitution will help too.

sepheronx wrote:Unemployment up 13% in August
http://tass.ru/en/economy/823160

A lot of playing with words but official average unemployment in Russia as of August is 5.3% which is quite low.

I also suppose if they do introduce the PMC law in coming months (if it does pass and it seems there are powerful people wanting it to), would bring down unemployment as well.  Hopefully more import substitution will help too.

PMC law?

Werewolf wrote:

sepheronx wrote:Unemployment up 13% in August
http://tass.ru/en/economy/823160

A lot of playing with words but official average unemployment in Russia as of August is 5.3% which is quite low.

I also suppose if they do introduce the PMC law in coming months (if it does pass and it seems there are powerful people wanting it to), would bring down unemployment as well.  Hopefully more import substitution will help too.

PMC law?

Yeah, some people are pushing for creation of private military companies in Russia and main points mentioned was it would employ a lot of officers whom were recently let go and other officers whom left after conscription but may not have a job. But number 1 issues raised were who would keep control/watch over them and how can they guarantee they wont work for anti russian entities to do work within Russia? So it is getting revised and put back into vote in november.

In January-August 2015 housing construction in Russia grew by 9.2%

I am generally confused. Trading economics and all these other sites are saying that construction contraction in Russia has declined significantly that has lead to decline in production and manufacturing, and thus caused an over decline in GDP. But here I am constantly reading of residential construction constantly increasing. So has industrial construction drastically dropped? I am also reading plenty of others like new roads, bridges and the like. So more infrastructure development.... The spaceport, zvezda shipyard, etc etc. I see it is a growth really....

Ruble fall causes wage parity between Russia and China

cheaper labor costs may induce companies to use Russia as a manufacturing base..

http://asia.rbth.com/news/2015/09/21/ruble_fall_causes_wage_parity_between_russia_and_china_49405.html

Good news is more manufacturing operations and factories will be set up inside Russia  

Bad news is.. who would want to compete with China in terms of wages?

Project Canada wrote:

Ruble fall causes wage parity between Russia and China

cheaper labor costs may induce companies to use Russia as a manufacturing base..

http://asia.rbth.com/news/2015/09/21/ruble_fall_causes_wage_parity_between_russia_and_china_49405.html

Good news is more manufacturing operations and factories will be set up inside Russia  

Bad news is.. who would want to compete with China in terms of wages?

Yes and no. Nominal terms, GDP per capital is closer to each other and GDP per capita in this terms will mean that it is getting far more expensive for Russia to produce goods in China. There is of course administrative costs and what not. So it will overall be cheaper to produce in Russia or at least much closer to similar costs. Only thing is though, is that China has a lot of infrastructure that is beneficial for people looking to produce somewhere without having to throw in the initial investment of building the proper facility.

But in terms of GDP per capita in PPP terms (which is important as it takes in consideration the value of goods and how far their currency within their own country takes them, and in this case, Russia is quite a bit farther ahead than China is.

Russia - 23292.91
China - 12608.87

China is in a steady incline while Russia had a decline all due to inflation causing a drop in average Russian's purchasing power.

These numbers though can be quite interesting, as Russia still has both provinces/states that are heavily underfunded and more or less costs the government more for upkeep than they gain, as well as other areas where people are indeed very very poor and has not seen investments since the 50's. China is also similar position too.

sepheronx wrote:

Project Canada wrote:

Ruble fall causes wage parity between Russia and China

cheaper labor costs may induce companies to use Russia as a manufacturing base..

http://asia.rbth.com/news/2015/09/21/ruble_fall_causes_wage_parity_between_russia_and_china_49405.html

Good news is more manufacturing operations and factories will be set up inside Russia  

Bad news is.. who would want to compete with China in terms of wages?

Yes and no.  Nominal terms, GDP per capital is closer to each other and GDP per capita in this terms will mean that it is getting far more expensive for Russia to produce goods in China.  There is of course administrative costs and what not.  So it will overall be cheaper to produce in Russia or at least much closer to similar costs.  Only thing is though, is that China has a lot of infrastructure that is beneficial for people looking to produce somewhere without having to throw in the initial investment of building the proper facility.

But in terms of GDP per capita in PPP terms (which is important as it takes in consideration the value of goods and how far their currency within their own country takes them, and in this case, Russia is quite a bit farther ahead than China is.

Russia - 23292.91
China - 12608.87

China is in a steady incline while Russia had a decline all due to inflation causing a drop in average Russian's purchasing power.

These numbers though can be quite interesting, as Russia still has both provinces/states that are heavily underfunded and more or less costs the government more for upkeep than they gain, as well as other areas where people are indeed very very poor and has not seen investments since the 50's.  China is also similar position too.

Yeah, quite interestingly Russian and Chinese nominal GDPs per capita are around the same right now, but that shouldn't be a long term thing. So the average Russian wages are around 500-600 USD in nominal terms (they used to be at around $1000), very similar to the Chinese numbers. (Although China might not overtake average Russian living standards anytime soon, at this rate the Chinese will richer than average citizens of Brazil, Turkey or Thailand (or the world average) very soon, which is very impressive considering where they are coming from and some excellent news for the multipolar world.)

Btw, the Bank of Finland released their forecast for the Russian economy: -4% this year, -2% in 2016 and a growth of 1% in 2017.

Very good for bank of Finland.

Lets wait for actual, real figures, not predictions that rarely come true from a bank of a member of a union that has to rely on a printing press to have growth (whom is also quite anti Russian).

Maybe Bank of Finland should suggest quantitative easing for Russia like EU does just to sustain itself. Hah.

Edit: I like how they are now using their crystal balls to try to make EU feel better about their shitty situation by saying "oh, its bad for Russia" when most of these idiots cannot forsee 10 mons from now, let alone a year.

sepheronx wrote:Very good for bank of Finland.

Lets wait for actual, real figures, not predictions that rarely come true from a bank of a member of a union that has to rely on a printing press to have growth (whom is also quite anti Russian).

Maybe Bank of Finland should suggest quantitative easing for Russia like EU does just to sustain itself. Hah.

Haha, expected reply. Although to be fair, that seems to quite similar to other estimates, including Russia's own, but maybe slightly more negative (like -2% next year).

Kimppis wrote:

sepheronx wrote:Very good for bank of Finland.

Lets wait for actual, real figures, not predictions that rarely come true from a bank of a member of a union that has to rely on a printing press to have growth (whom is also quite anti Russian).

Maybe Bank of Finland should suggest quantitative easing for Russia like EU does just to sustain itself. Hah.

Haha, expected reply. Although to be fair, that seems to quite similar to other estimates, including Russia's own, but maybe slightly more negative (like -2% next year).

You guys couldnt even predict the syrian refugee crysis happening even though the issue was quite evident to happen when your allies decided to arm terrorists and destroy a country (same nation that your politicians are ready to give head to, like what that polish minister stated his nation does). So why should I take your guys prediction or any, at face value? Want so called accurate predictions? Go look back at 2008/2009 financial crisis and see what was "predicted".

Here is a thought, what if the bill being pushed by the Duma that is to increase minimum wage by 7%, causes a massive spending spree? I mean, domestic consumers account for 80% or over Russias GDP. What if petrol prices keep increasing and Russia starts selling petrol en mass for export? All of these will adjust those "predictions" making predictions bullshit. Hence why even economy minister is now setting budgets at a yearly base than the determined 3 year base. No one has a clue.

Share of Internet economy in Russia at 10% of GDP — watchdog
http://tass.ru/en/economy/823371

Apparently Russias economy is more diversified than what most thought.

Nice

Russia's international reserves rose by $ 3.9 billion

sepheronx wrote:Share of Internet economy in Russia at 10% of GDP — watchdog
http://tass.ru/en/economy/823371

Apparently Russias economy is more diversified than what most thought.

So it is basically almost as big as the whole oil and gas sector. That is quite impressive
and someone should let Obama and Hillary know.

kvs wrote:

sepheronx wrote:Share of Internet economy in Russia at 10% of GDP — watchdog
http://tass.ru/en/economy/823371

Apparently Russias economy is more diversified than what most thought.

So it is basically almost as big as the whole oil and gas sector.   That is quite impressive
and someone should let Obama and Hillary know.  

Would someone mind breaking down the different sectors of Russia's economy in to percentage of GDP? Like agriculture, heavy industrial manufacturing, tech industry finished products, banking&finance, hydrocarbons, timber and other raw materials, etc.

kvs wrote:

sepheronx wrote:Share of Internet economy in Russia at 10% of GDP — watchdog
http://tass.ru/en/economy/823371

Apparently Russias economy is more diversified than what most thought.

So it is basically almost as big as the whole oil and gas sector.   That is quite impressive
and someone should let Obama and Hillary know.  

So maybe is Yandex? and Mail.RU? because i dont think is Russian sales over internet..? it is?
Does Russia have an Amazon like business that sell Russian products and deliver it at people
homes?

Vann7 wrote:
Does Russia have an Amazon like business that sell Russian products and deliver it at people
homes?

I wish. It has this http://www.ulmart.ru it's quite good. But hottest thing this year was.... voentorg.ru

Russia's GVA in 2011.

I still need to find the GDP breakdown.

more important is what generates foreign revenue to the budged of RF, things like construction is important for devolopment its infrastructure after all but its "inland" money, its partly like putting 100€ from your left pocket in to your right pocket, but you need somebody "else" to give you 100€ to put it in your pocket

its more important what we "export" and "how much of what" and exporting is not only industry, IT sector which exports digital IT products is also exporting of if the construction sector exports construction by building things in other countrys making a profit on it and bringing with that the foreign "fresh" money back home that is true GDP "growth" that new fresh money added to your inland capital from somebody else

and we "mostly" export oil and gas... and i said mostly not "only" so don't come at me with "but look we have something here and here and a littel here"

Read it in full , very good info

Igor Sechin makes a report at the Conference in Singapore

NationalRus wrote:more important is what generates foreign revenue to the budged of RF, things like construction is important for devolopment its infrastructure after all but its "inland" money, its partly like putting 100€ from your left pocket in to your right pocket, but you need somebody "else" to give you 100€ to put it in your pocket

its more important what we "export" and "how much of what" and exporting is not only industry, IT sector which exports digital IT products is also exporting of if the construction sector exports construction by building things in other countrys making a profit on it and bringing with that the foreign "fresh" money back home that is true GDP "growth" that new fresh money added to your inland capital from somebody else

and we "mostly" export oil and gas... and i said mostly not "only" so don't come at me with "but look we have something here and here and a littel here"

This is utter rubbish.  You are equating GDP to a mom and pop shop selling their wares.   You equate these sales to exports.   And
you equate any exchange of money inside the country to exchange of money between mom and pop.   What breathtaking,
incorrect BS.

The internal Russian GDP consists of millions of moms and pops selling their wares/services for rubles.   All the moms and pops
who sell to foreigners are just some part of the whole picture.   If they disappeared, then Russia's GDP would not
disappear.   It would shrink by the fraction they sell plus an additional amount associated with amplifier effects.   The total
loss would be about $300 billion per year.  

In fact, there is a $2 GDP boost from every $1 of imports eliminated and produced at home.   Russia should worry more about
its imports than its exports.   Russia is not an export economy like Germany and Japan.    Neither is China in spite of the fact
that so much junk is made there.   China's GDP is maintained by domestic demand as is Russia's.