Russian Economy General News: #6

2016 GDP estimates have been slowly but steadily getting worse for a while. This TASS post on the subject is the latest I've seen.

-1.6% GDP contraction predicted for 2016

A Different Voice wrote:2016 GDP estimates have been slowly but steadily getting worse for a while. This TASS post on the subject is the latest I've seen.

-1.6% GDP contraction predicted for 2016

Isn't -1.6% GDP contraction better than the -3,8% of 2015? Seems to me
they are stabilizing the crisis and not "steadily getting worse".

In another note , i dont understand this news about a major change
in US economy soon ,that will affect all world economy. A major change in how
US economy works is in progress. according to insiders.. and that the changes people
will not like it.

https://www.youtube.com/watch?v=-nEH-RI8Dhs


This is posted here because is so big ,that deserve special attention.
Insiders from banks in US are saying ,US treasury notes will be changed. and a new Republic
will be created.. extended Term for Obama as President because elections will be suspended.. and banks are already doing Emergency exercises for a major event they expecting. ,where they will go for "Hollydays.. "can anyone explain what all that means..? sounds like people money  from banks will be taken by banks to stabilize the nation economy. .
insiders really mean? and what it will mean for US economy ? that it will default?

we are in the shit right now, and we were expecting to "slowly" start growing by now, we are not, inflation is very high, importing is as expensive as never before since 1998 but im not only pessimistic

actually im more positive since never before, maybe we actually needed this, it can be a opportunity with the right reforms, some of the market liberalization reforms were done in 2015 specially with a speed that is unseen for stagnate russia.
if we continue that path stronger and faster we can get out of it with a stronger and more flexible and competitive economy as never before.

but for now without out a doubt times are hard and difficult

A Different Voice wrote:2016 GDP estimates have been slowly but steadily getting worse for a while. This TASS post on the subject is the latest I've seen.

-1.6% GDP contraction predicted for 2016

You gotta do better than that.  In what I mean, read the articles you post.

Who posted the claim? An agency.  Not authorities or CBR, but a third party.  We also heard third parties claim -3% for 2016.  We heard third parties state -10% for 2015.

Point is, contraction combined means drop is very small compared to 2009, but means that things are now going slower.  As nationalrus said, it will now be based on the changes.  Inflation this year is so far in single digits and not double.  So interest rates may drop, which will see a growth in spending.

sepheronx wrote:

A Different Voice wrote:2016 GDP estimates have been slowly but steadily getting worse for a while. This TASS post on the subject is the latest I've seen.

-1.6% GDP contraction predicted for 2016

You gotta do better than that.  In what I mean, read the articles you post.

Who posted the claim? An agency.  Not authorities or CBR, but a third party.  We also heard third parties claim -3% for 2016.  We heard third parties state -10% for 2015.

Point is, contraction combined means drop is very small compared to 2009, but means that things are now going slower.  As nationalrus said, it will now be based on the changes.  Inflation this year is so far in single digits and not double.  So interest rates may drop, which will see a growth in spending.

I'm just offering a data point about the worsening GDP estimates for 2016.  I agree that it is important to look at who is making the estimate. Some sources are more accurate and unbiased than others. Government estimates should be given more weight than that of random third parties. However, this estimate was not made by a western bank or rating agency. The TASS post references an estimate by ACRA. ACRA was set up as a Russian unbiased alternative to western ratings agencies who always treat Russia and Russian institutions unfavorably. ACRA is owned by a collection of 26 of the largest Russian banks and companies, many of which are partially owned by the Russian government.  

My point is that 2016 GDP estimates have slowly but steadily gotten worse. No doubt 2016 will show less of a decline than 2015, but GDP continues to shrink. Not so long ago predictions were that GDP would increase slightly in 2016.  No one is predicting that now.

It's important to remember these are just predictions and hopefully things will get better soon.

Nice

[url=http://www.vestifinance.ru/articles/67678[/url]

Russia's international reserves increased from 5 to 12 February from $ 376.7 billion to $ 382.4 billion, according to the Bank of Russia on Thursday.

Do you think the GDP will return to growth this year?

sepheronx wrote:

A Different Voice wrote:2016 GDP estimates have been slowly but steadily getting worse for a while. This TASS post on the subject is the latest I've seen.

-1.6% GDP contraction predicted for 2016

You gotta do better than that.  In what I mean, read the articles you post.

Who posted the claim? An agency.  Not authorities or CBR, but a third party.  We also heard third parties claim -3% for 2016.  We heard third parties state -10% for 2015.

Point is, contraction combined means drop is very small compared to 2009, but means that things are now going slower.  As nationalrus said, it will now be based on the changes.  Inflation this year is so far in single digits and not double.  So interest rates may drop, which will see a growth in spending.

The world is clearly in a recession. So anyone expecting robust growth in Russia is out of touch. A detail always ignored here is that
Russia does not engage in CPI and PPI manipulation like the USA. There are no hedonics adjustments in the Russian CPI calculation.
In fact, the inflation rate is is overestimated in Russia because the long-term transition price adjustment that is still ongoing from
1991 (check out the prices for military hardware and compare them to the "1st world") is included as raw inflation. I posted on this
before. The CBR is engaged in utter inanity with its CPI and PPI calculations.

The bottom line is that 1.6% GDP contraction in Russia is a 2-3% GDP increase in the USA.

And you are right, this forecast is pulled from some biased anus. I think that the GDP will grow about 2% in 2016.

''Barclays Hints That Russia's Economy May Have Finally Bottomed

http://www.forbes.com/sites/kenrapoza/2016/02/18/barclays-hints-that-russia-economy-may-have-finally-bottomed/#60f2fe849ab3

kvs wrote:

sepheronx wrote:

A Different Voice wrote:2016 GDP estimates have been slowly but steadily getting worse for a while. This TASS post on the subject is the latest I've seen.

-1.6% GDP contraction predicted for 2016

You gotta do better than that.  In what I mean, read the articles you post.

Who posted the claim? An agency.  Not authorities or CBR, but a third party.  We also heard third parties claim -3% for 2016.  We heard third parties state -10% for 2015.

Point is, contraction combined means drop is very small compared to 2009, but means that things are now going slower.  As nationalrus said, it will now be based on the changes.  Inflation this year is so far in single digits and not double.  So interest rates may drop, which will see a growth in spending.

The world is clearly in a recession.   So anyone expecting robust growth in Russia is out of touch.   A detail always ignored here is that
Russia does not engage in CPI and PPI manipulation like the USA.   There are no hedonics adjustments in the Russian CPI calculation.
In fact, the inflation rate is is overestimated in Russia because the long-term transition price adjustment that is still ongoing from
1991 (check out the prices for military hardware and compare them to the "1st world") is included as raw inflation.   I posted on this
before.  The CBR is engaged in utter inanity with its CPI and PPI calculations.  

The bottom line is that 1.6% GDP contraction in Russia is a 2-3% GDP increase in the USA.

And you are right, this forecast is pulled from some biased anus.   I think that the GDP will grow about 2% in 2016.

Here is new interesting report about Russia economy.. finally looks like Glaziev is
calming its hysteria about the central bank but just a bit.. from wanting to kill
Elvira to actually discussing things . And interestingly now he doesn't speak in terms
of a powerless Government that have no control of the CEntral Bank. He only nows speaks
in terms of a Goverment that have a lot of influence in the bank but that the Central bank can interpret laws in any way it wants.   So now from Glaziev own mouth he says the Russian Government can influence the central Bank..and not necessarily by pointing a gun at elvira
head..

http://thesaker.is/sergei-glaziev-the-full-extend-of-economic-manipulations-in-russia/

His main complains is Russian speculators and why the central banks to not stabilize the ruble.
And i still think of a possibility that the Central bank/Russian government strategy to keep the Ruble in the ~80s.. to counter the very low oil prices. Someone even mentioned ,i think it was you KVS that the government was speculating its own currency ,and on purpose keeping the ruble at low value to attract investors in Russia. Not an economist. .but if i was to
lead a bank in Russia.. the first thing i will need to see and try to predict is the world political climate.. What the west is doing to Russia ,their sanctions and their attacks on the ruble and oil prices war.. ,the probability of a major world war to happen with Russia involved.. etc  and create scenarios ,to see which way could be the best one.. Because you can plan for example
a stable economy now..vs a stable economy later? What give me a lot of hope about Russia Central Bank is precisely them that they are increasing the Russian reserves like there is no tomorrow.. and saving money for the future and lowering the Russian debt cant never be a negative thing..Also the Central bank is doing the unthinkable of what Glaziev was claiming.
It is creating its own nation wide payment card ,to not be dependent of Visa and Mastercard..  and no longer trading in dollars .. and creating an alternative to SWIFT International Bank transaction system.. this will be as Big as Russia creating a new internet world wide if not more..Because if they pull it ,it will mean that Americans no longer will be able to monitor the flow of money in the world. .Doesn't look like a bank in bed with the IMF and Bank of America or the western central banks to me. as Glaziev earlier claimed.

If the bank was wasting Russian Government reserves ,and was creating debt like there is no tomorrow and not following any of Putin demands ,then i will be worried. but is the opposite.
My bet is that is a Semi Private bank because it doesn't behave as an institution totally independent of Russian Government policies.

In more news.. omg Russia economy is getting worse and worse Voice was right..
The next report comes straight from Government and confirms his views..

Russian economy likely to shrink — deputy PM  


http://tass.ru/en/economy/857794


For anyone that live in RUssia however any Statistics is meaningless
whether is bad or good ,regardless the source if he is unemployed and barely have money for food. and sustain a family. I really think however that the Russian government have
the capabilities to do the job and reform its economy ,based on the enormous resources
they have and talent. but industrial revolutions always takes time..

Russian oil company Lukoil is to supply around 2 million tons of petroleum to Iran in exchange for oil, and has also announced plans to buy 250 petrol stations in the Netherlands, Belgium and Luxembourg. However, petroleum production and sales in Russia are in growing danger of becoming unprofitable.
Read on RBTH

Karl Haushofer wrote:Do you think the GDP will return to growth this year?

I think those forecasts are based on the oil price. So some time ago they expected a growth of around 1-2% with oil at $50 per barrel. But right now the oil price is barely at $30.

So something like this??:

$30 per barrel: -1-2%
$40 per barrel: 0%
$50 per barrel: 1%+
$60 per barrel: 2%+

??????

But in any case, it's likely that the GDP will grow in 2017 (unless the oil price somehow totally collapses). The economy is bottoming out.

Vann7 wrote:In more news.. omg Russia economy is getting worse and worse Voice was right..
The next report comes straight from Government and confirms his views..

Russian economy likely to shrink — deputy PM  


http://tass.ru/en/economy/857794


For anyone that live in RUssia however any Statistics is meaningless
whether is bad or good ,regardless the source if he is unemployed and barely have money for food. and sustain a family. I really think however that the Russian government have
the capabilities to do the job and reform its economy ,based on the enormous resources
they have and talent. but industrial revolutions always takes time..

Agreed that the improvement in the economy will take some time. As far as the TASS article goes I believe the 0.7 growth prediction made the news based upon Ulyukayev's public statement with that number. He said 2016 GDP growth was forecast  at 0.7% based on $50 oil back in SEPTEMBER 2015. I don't believe his Ministry has updated that forecast. Since then predictions have worsened for 2016 GDP growth. All predictions I have seen say 2016 will be the bottom for annual GDP shrinkage.

News report that military part of the budget may be cut by 5% for 2016.

report of 5% military budget cut

Looks like the government continues to reduce the budget, including the military budget. It is impressive how fiscally disciplined the Russian government is. In most places responsible budget cuts like this would be impossible to implement.

Finance Ministry: GDP growth will not exceed 1% per year at the current level of investment

http://ria.ru/economy/20160219/1377159924.html

KRASNOYARSK, February 19 -. RIA Novosti Russia's GDP growth in the long term can not exceed 1% per year, while maintaining investment at the current level, said Deputy Finance Minister Maxim Oreshkin.

"Taking into account Russia's demographics, if we will be in the range of investments, where we are now - is 16-18% (of GDP), if this proportion will be maintained, the growth (GDP) of more than 1% (a year - Ed.) can not be obtained, "- he said at the Krasnoyarsk economic forum.

He acknowledged that the increased share of investment, taking into account the demographic restrictions in Russia, will not be easy, it should be preceded by major structural changes in the economy.

"If you look at the current situation in the labor market, we see that the large unemployment in the country is not present, it is at the minimum level. This means that if we want to invest more, we have the current structure of employment to withdraw more people to send them to work . in other sectors of these major structural changes can not be made without structural reforms, "- he said.

Here is one of the key reasons why Russia has an anemic GDP growth, yet none of the above posts even touches on this
vital subject:

http://www.awarablogs.com/absurd-central-bank-policies-deepen-russias-recession/

In the above excellent article, we see the utter inanity (or more likely 5th column malice) of the CBR interest policy.
They are still holding the key lending rate at 11% even though inflation in 2016 is clearly going to be around 6%.
As noted in the article, Russia's imports are now too small to exert much price pressure and in fact, all of the high
priced items have been substituted with cheaper alternatives or are being domestically produced.

The CBR should apply the same interest rate to inflation ratio as in 2015.  In 2015 the ratio was 11:15 so in 2016
the lending rate should be 4.4%.   This is a very reasonable lending rate and not the loan shark nonsense that it is pulling now.

Russian CB added 21.8 metric tonnes of gold in January, bringing reserves to 1437 metric tonnes.

David Stockman The Global Economy Has Entered The Crack Up Phase

World-Renowned Economist Sergei Guriev on the Russian Economy: Takeaways from his Speech at the Oxford Guild

http://www.huffingtonpost.com/entry/worldrenowned-economist-s_b_9272876.html?section=india

Austin wrote:World-Renowned Economist Sergei Guriev on the Russian Economy: Takeaways from his Speech at the Oxford Guild

http://www.huffingtonpost.com/entry/worldrenowned-economist-s_b_9272876.html?section=india

What rubbish.

The 2008 financial crisis came as a shock to many Russian policymakers who were largely unprepared for a scenario in which oil prices declined steeply and associated their popularity with maintaining income growth in their respective regions.

What a load of bollox. Reminds me of the climate change denier trope that the world has been "cooling" since 1998. Well, you
stupid fucks, 1998 for climate and 2008 for oil were outliers and do not establish the trend.



If the 2000 to 2008 period was producing "Stalinist" level growth, how come the post 2008 oil price increase to levels higher than
most of the pre-2008 period did not result in the same growth. The thesis here is that Russia is a one-commodity banana republic
that depends on oil exports for its GDP growth. Obviously this thesis is not supported by the data.

Here is another howler:

Russia's reliance on oil revenues is not comparable to Saudi Arabia's for instance, as its share is only around 20% or 30% of GDP depending on the year you examine.

Really? According the world bank Russia's oil rent as a percentage of GDP was 13.7%. Since the ruble exchange to the dollar
declined basically in proportion to the oil price decline this percentage has not changed. The 30% figure is pulled straight
from the ass of whoever claimed it.

Guriev clearly knows who pays for the butter on his slice of bread. He is serving his NATO patrons well.