Russian Economy General News: #5

sepheronx wrote:Russia increases gold reserves in sept by 43.5T
http://sdelanounas.ru/blogs/69391/

magnumcromagnon wrote:

Russia’s foreign debt declined 30% over year despite sanctions, challenges — Central Bank

MOSCOW, October 24 - RIA Novosti. The cost of servicing the national debt of the Russian Federation in 2016 reached 645.8 billion rubles, or 0.8% of GDP, according to the draft federal budget for 2016.

"Share in total expenditures of the federal budget in comparison with 2015 (3.8%) increased and amounted to 4%," - said in a memorandum to the draft budget, published on the website of the State Duma.

In 2016, according to the draft, the budget allocation for servicing the public debt of Russia in comparison with 2015 will increase by 60.538 billion rubles due to the increased borrowing and projected a further weakening of the ruble.

The cost of servicing the state internal debt of the Russian Federation in 2016 compared with the level in 2015 will increase by 54.278 billion rubles - up to 481.962 billion rubles. The cost of servicing the external debt will increase over the level of 2015 in 6.259 billion rubles - up to 163.875 billion rubles ($ 2.6 billion).

Total income from public debt of the Russian Federation in 2016 will, according to the draft budget, 393.2 billion rubles, while the volume of the state debt of the Russian Federation will increase by the end of 2016 to 12.318 trillion rubles.

MOSCOW, October 24 - RIA Novosti. The amount of the Reserve Fund of the Russian Federation by the end of 2016 will drop to 1 trillion rubles and the National Welfare Fund - up to 4.666 trillion rubles, according to a draft federal budget for 2016, published on the website of the State Duma.

"Due to the fact that in 2016 the reserve fund is not expected by the end of the year under review, its volume will decrease to 1 trillion 51.4 billion rubles," - the document says. The authorities intend to spend the next year from the Fund 2, 137 trillion rubles to finance the budget deficit.

"The total amount of balances SWF, adjusted for exchange rate differences at the end of 2016 will amount to 4.666 trillion rubles," - the document says.

"It will continue to use the National Welfare Fund (NWF) for co-financing of pension savings, as well as placement of the fund for the financing of major infrastructure projects. By the end of 2016 the volume of

MOSCOW, October 24 - RIA Novosti. The amount of the Reserve Fund of the Russian Federation by the end of 2016 will drop to 1 trillion rubles and the National Welfare Fund - up to 4.666 trillion rubles, according to a draft federal budget for 2016, published on the website of the State Duma.

"Due to the fact that in 2016 the reserve fund is not expected by the end of the year under review, its volume will decrease to 1 trillion 51.4 billion rubles," - the document says. The authorities intend to spend the next year from the Fund 2, 137 trillion rubles to finance the budget deficit.

"The total amount of balances SWF, adjusted for exchange rate differences at the end of 2016 will amount to 4.666 trillion rubles," - the document says.

"It will continue to use the National Welfare Fund (NWF) for co-financing of pension savings, as well as placement of the fund for the financing of major infrastructure projects. By the end of 2016 the volume of

MOSCOW, October 24 - RIA Novosti. The cost of servicing the national debt of the Russian Federation in 2016 reached 645.8 billion rubles, or 0.8% of GDP, according to the draft federal budget for 2016.

"Share in total expenditures of the federal budget in comparison with 2015 (3.8%) increased and amounted to 4%," - said in a memorandum to the draft budget, published on the website of the State Duma.

In 2016, according to the draft, the budget allocation for servicing the public debt of Russia in comparison with 2015 will increase by 60.538 billion rubles due to the increased borrowing and projected a further weakening of the ruble.

The cost of servicing the state internal debt of the Russian Federation in 2016 compared with the level in 2015 will increase by 54.278 billion rubles - up to 481.962 billion rubles. The cost of servicing the external debt will increase over the level of 2015 in 6.259 billion rubles - up to 163.875 billion rubles ($ 2.6 billion).

Total income from public debt of the Russian Federation in 2016 will, according to the draft budget, 393.2 billion rubles, while the volume of the state debt of the Russian Federation will increase by the end of 2016 to 12.318 trillion rubles.

Austin wrote:The State Duma issued a draft spending on debt service of the Russian Federation

http://ria.ru/economy/20151024/1307333399.htm

MOSCOW, October 24 - RIA Novosti. The cost of servicing the national debt of the Russian Federation in 2016 reached 645.8 billion rubles, or 0.8% of GDP, according to the draft federal budget for 2016.

"Share in total expenditures of the federal budget in comparison with 2015 (3.8%) increased and amounted to 4%," - said in a memorandum to the draft budget, published on the website of the State Duma.

In 2016, according to the draft, the budget allocation for servicing the public debt of Russia in comparison with 2015 will increase by 60.538 billion rubles due to the increased borrowing and projected a further weakening of the ruble.

The cost of servicing the state internal debt of the Russian Federation in 2016 compared with the level in 2015 will increase by 54.278 billion rubles - up to 481.962 billion rubles. The cost of servicing the external debt will increase over the level of 2015 in 6.259 billion rubles - up to 163.875 billion rubles ($ 2.6 billion).

Total income from public debt of the Russian Federation in 2016 will, according to the draft budget, 393.2 billion rubles, while the volume of the state debt of the Russian Federation will increase by the end of 2016 to 12.318 trillion rubles.

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From the above news we can deduce the GDP and Public Debt of Russia by end of 2016

Russian Federation in 2016 reached 645.8 billion rubles, or 0.8% of GDP

GDP End of 2016 : 80.725 Trillion Roubles

the volume of the state debt of the Russian Federation will increase by the end of 2016 to 12.318 trillion rubles.

Public Debt end of 2016 :  12.318 Trillion Rouble ,  GDP 80.725
Public Debt % of GDP ( 2016 ) :  15.25 %


Let me know if my calculation is right

Public Sector External Debt covers liabilities of the General Government, the Central bank, and those entities in the banking and other sectors that are public corporations, i.e. non-financial or financial corporations which are subject to control by government and the Central bank. Control is established (directly or indirectly) through ownership of more than half of the voting shares or otherwise controlling more than half of the shareholder voting power. Indebtedness of any domestic institutional unit not meeting the definition of Public Sector External Debt is classified as Private Sector External Debt.

kvs wrote:

Austin wrote:The State Duma issued a draft spending on debt service of the Russian Federation

http://ria.ru/economy/20151024/1307333399.htm

MOSCOW, October 24 - RIA Novosti. The cost of servicing the national debt of the Russian Federation in 2016 reached 645.8 billion rubles, or 0.8% of GDP, according to the draft federal budget for 2016.

"Share in total expenditures of the federal budget in comparison with 2015 (3.8%) increased and amounted to 4%," - said in a memorandum to the draft budget, published on the website of the State Duma.

In 2016, according to the draft, the budget allocation for servicing the public debt of Russia in comparison with 2015 will increase by 60.538 billion rubles due to the increased borrowing and projected a further weakening of the ruble.

The cost of servicing the state internal debt of the Russian Federation in 2016 compared with the level in 2015 will increase by 54.278 billion rubles - up to 481.962 billion rubles. The cost of servicing the external debt will increase over the level of 2015 in 6.259 billion rubles - up to 163.875 billion rubles ($ 2.6 billion).

Total income from public debt of the Russian Federation in 2016 will, according to the draft budget, 393.2 billion rubles, while the volume of the state debt of the Russian Federation will increase by the end of 2016 to 12.318 trillion rubles.

######################

From the above news we can deduce the GDP and Public Debt of Russia by end of 2016

Russian Federation in 2016 reached 645.8 billion rubles, or 0.8% of GDP

GDP End of 2016 : 80.725 Trillion Roubles

the volume of the state debt of the Russian Federation will increase by the end of 2016 to 12.318 trillion rubles.

Public Debt end of 2016 :  12.318 Trillion Rouble ,  GDP 80.725
Public Debt % of GDP ( 2016 ) :  15.25 %


Let me know if my calculation is right

The current state debt is $39 billion and the figure above is $18.7 billion.    Not bad at all.

Things are pretty grim in the Russian economy, but some of the country’s leading economists are wondering if Russia Inc has turned the corner some 10 months after the biggest devaluation of the ruble since the 1998 crash.

“September seems to have been the starting point of Russia’s economic recovery. If these trends continue in 4Q15, 2016 could be a strong year, and we think GDP growth of 2.5% would be realistic. However, for this to be the case, the [central bank] would have to be neutral on the FX market, which would protect the economy against rapid ruble appreciation,” Evgeny Gavrilenkov, chief economist at the state-owned banking giant Sberbank said in a note on October 21.

The trends he is referring to were better-than-expected industrial production and investment results published at the start of the same week by Rosstat, which “point to an upturn”.

Several sectors saw growth after months of falls. Agriculture expanded 4% year on year (y/y) in September, putting the nine month tally at 0.4% y/y. Freight transportation (an excellent proxy for overall economic activity) increased 0.8% last month, but the nine-month growth was still negative (albeit improved) at -1.1%.

Formally, retail sales sank 10.4% y/y in September, in line with a 9.7% decline in real wages. High inflation (15.7% y/y) was the reason for the significant drop in both indicators. However, when adjusted for seasonality and calendar days, retail sales were flat month on month (m/m) in the second and third quarter, Sberbank reports.

“We think the official statistics may have exaggerated inflation in 3Q15. As we have noted previously, high m/m inflation in August was driven by the foreign tourism segment (thanks to ruble depreciation), though the tourism statistics indicate a drastic decline in demand for this service. This shift in demand does not seem to have been included in the CPI calculation, which elevated the inflation figure. If this is indeed the case, real wages and retail sales would have been undervalued in 3Q15,” Gavrilenkov believes.

Alfa Bank’s Natalia Orlova was in the middle of these positions. While she acknowledged the improvement in investment and the deterioration of retail, she believes that the economy remains “frozen”, as it will have to cope with an austere budget in 2016 and state spending remains the major economic driver.

“The outlook [for Russia’s economy] remains frozen due to the deterioration of lending activity in September, as well as the cabinet’s decision to unveil a tight 2016 budget draft, likely pushing the real sector toward austerity,” Orlova said in a strategy piece the same week as the data releases. “But the modest 3.7% y/y decline in September industrial output (3.2% y/y for 9M15) and surprisingly upbeat 5.6% y/y contraction in investment suggest that Russian producers are playing a key role in limiting the contraction in economic activity.”

Banks stabilize

There was some good news elsewhere too. After being crushed by the emergency interest rate hike to 17% by the Central Bank of Russia (CBR) last December, the banking sector seems to have stabilized. Retail deposits started to rise again in the summer, providing banks with some desperately needed fresh capital.

More importantly, the CBR’s assistance to the bank sector – the central bank is currently the only real source of capital thanks to sanctions – seems to have peaked in the summer. In the depths of the 2008-09 global crisis, the CBR share of bank funds rose to a maximum of 3% of total capital. At the start of last year the CBR already accounted for 11% of capital and this rose to a peak of 15% this summer. However, in the last three months the share has started to fall again, suggesting the worst is past. Both corporate and retail lending began to grow modestly over the summer for the first time in over year. “We expect the situation in the banking sector to remain stable next year, with banks gradually boosting lending as they’re supporting the economic growth,” CBR governor Elvira Nabiullina said on October 21.

Part of the reason for the improvement in the health of Russia’s banking sector is that companies seem to be approaching the end of their deleveraging process. Cut off from the international capital markets, banks and companies have been forced to pay down debt rather than refinance it. Those obligations have been driving much of the capital flight in the last years, but over the first nine months of this year capital flight fell to $52.2bn, with $30bn of that going to pay off debt. That means Russia will probably see much less money leave than the $131bn the CBR was predicting would flee this year in January. The World Bank now expects capital outflow from Russia at $113bn in 2015, $82bn in 2016

The capital flight has been pushing down Russia’s total debt. While the sovereign debt is now in single digits versus GDP, Russia's total debt (including commercial debt) dropped below 30% of GDP in October, according to Nabiullina. “Despite the challenging period and financial sanctions environment, our debt declined 30% from January 2014 to date,” she said on October 21.

Investment growth

But the most encouraging signal of all is an improvement in the fixed investment numbers. Investment has been falling for 20 straight months and it doesn’t matter what else the government does, without fresh investment Russia’s economy is doomed to stagnation.

Fixed investment delivered a pleasant surprise in September by expanding by 4.4% m/m even if it still fell 5.6% y/y. However, even September’s fall was a significant improvement over the falls in August (down 6.8%) and July (down 8.5%). “Investment has started growing in m/m terms even after adjusting for seasonal and calendar factors. We think this is linked to the decent results previously reported and greater macroeconomic stability,” Gavrilenkov said.

Sberbank was not alone in feeling a bit more optimistic after chewing over the October 20 data release. Uralsib’s chief economist, Olga Sterina, also ran through the numbers and concluded they were a lot rosier than the market had been expecting. However, Sterina highlighted that consumers are still very depressed, with retail trade contracting another 10.4% after a 9.1% fall in August and a 8.5% fall in July. Booming consumption is not going to be what lifts Russia out of this recession. “While one has to admit that the economic situation improved somewhat in September judging by the dynamics in investment, construction, industry and agriculture, but consumer demand is still very weak and unlikely to improve in the short term,” said Sterina in a note on October 21.

The debate amongst economists is just how bad the contraction is going to be this year - and while everyone agrees there will be a contraction, there is little consensus on how severe it will be.

Uralsib estimates Russia’s economy contracted 4.9% y/y in September versus 5.1% y/y in August. Russia’s Economy Ministry is more optimistic, estimating that GDP dropped just 3.8% y/y in September after falling 4.6% y/y in August. And clearly this year is going to be tougher than most were thinking in January following a raft of downgrades in the last weeks.

In charts we live... and in charts we delight.

Here is a neat summary of global current account balances (horizontal axis) against the rate of change in the current account over 12 months through 2Q 2015.



6th largest surplus: Russia. Fastest growth in surplus: Russia. So that petrodollar economy, then... like, say Saudi Arabia?..

Now, think of the favourite theory of 'sustainability' advanced by the likes of the Euro-centric Bruegel and its followers. The said theory rests on sustainability being equivalent to medium-term or long-term external balances... either that theory (underpinning most of the official EU economic mantra) off the rocker or... take a look at the chart again.

No comment beyond.

MOSCOW, October 27. /TASS/. Next year could become the last for the Reserve Fund, Russia’s Finance Minister Anton Siluanov said Tuesday.

"Our reserves volume [in 2015 - TASS] will decrease by approximately 2.6 trillion rubles ($40.85 bln) - more than half. This means that 2016 is the last year when we are able to spend our reserves that way. After that we will not have such resources," he said.

According to the minister the Russian budget will lack 900 bln rubles ($14.1 bln) in 2016 if oil prices and dollar exchange rate remain unchanged.

"If the current oil prices and exchange rates remain the same, and the current oil price is at around $44 per barrels for Urals, and the ruble exchange rate is about 62 rubles to the dollar, we can fall 900 bln rubles ($14.12 mln) short. We really face such risks," the mnister said.

The draft budget for 2016 is based on the forecast of the average annual oil price at $50 per barrel and the average annual exchange rate at the level of 63.3 rubles per dollar.

The draft federal budget for 2016 was submitted by the Government to the State Duma on October 23. According to 2016 draft federal budget published by Russia’s Finance Ministry, the federal budget revenues will amount to 13.6 trillion rubles ($218.28 bln), expenditures - to 15.8 trillion rubles ($253.9 bln) while budget deficit will stand at 2.1 trillion rubles ($35 bln), or 2.8% of GDP. The document implies forecasted GDP at 78.673 trillion rubles ($1.26 trillion) and inflation rate not exceeding 6.4%.

Budget for 2016 is fundamentally different from the document prepared in 2014. The government is forming one-year budget for next year, excluding 2017 and 2018. Also, budget rule, which determines the maximum expenditure level based on oil prices [ultimate level of budget expenditures is determined on the basis of income under oil settling price plus 1% of GDP, if oil prices decrease, the settlement price is determined as the average over the past 3 years - TASS], is revoked for 2016. The budget will be submitted to the State Duma (lower house of parliament) later than usual - on October 25 instead of October 1.