Russian Economy General News: #8

Kimppis wrote:That January growth rate is promising, I guess, especially considering that last year Q1 growth was only 0.6% (IIRC).

I am sure Vova planned to have good results during his campaign too I believe that inflation si important factor but the stuff increasing so called productivity is most important factor in growth of salaries and % PKB.




The volume of bank deposits of Russians in 2017 increased by 7.4%

Подробнее на ТАСС:
http://tass.ru/ekonomika/4980324

miketheterrible wrote:

franco wrote:Two thousand plants are being built in Russia

Having survived the dashing 90-ies, when more than 80% of the entire industry of the country was plundered, and then closed, Russia revives its former production potential.

In recent years, especially after the introduction of Western sanctions, several thousand new plants and factories have been opened in our country. In the next 5 years, according to economists, in Russia will be built about 2000 production capacity. The total volume of investments is estimated at trillions of rubles.

One of the most ambitious future projects will be a giant gas liquefaction plant, Arctic LNG-2. It will be much more powerful than the already constructed Yamal-LNG and will require almost 600 billion rubles for its implementation. Almost as much will be invested in the LNG plant in the Baltic, the commissioning of which is scheduled for 2020. By 2025, our country can become one of the leaders in terms of volumes of liquefied gas produced.

Mr Franco, what is the link to this?

I have read that about 700 planned production of import substitution is being worked on currently.  So new factories mixed with advancements of current plants will revive Russia altogether.

Part of where the 2,000 came from;

https://www.youtube.com/embed/t7ULl0Tjg4Y?rel=0&wmode=transparent

Head of RFPI: raising the S & P rating of the Russian Federation could add 0.2-0.3% to economic growth

MOSCOW, February 24. / TASS /. The upgrade by the international rating agency S & P of the sovereign rating of the Russian Federation will increase investor interest in Russian projects and in the next few months could add 0.2-0.3% to the economic growth in the country, said Kirill Dmitriev, Director General of the Russian Direct Investment Fund.

"The revision of the rating will allow launching dozens of investment projects, foreign investors receive additional confirmation of the attractiveness of the Russian market, and Russian companies, after improving their corporate ratings, will be able to raise capital on more favorable terms," ​​the head of the RFPI told journalists. months can add 0.2-0.3% to economic growth in the Russian Federation. "

According to Dmitriev, the agency's assessment reflects a positive view of investors on the state of the Russian market.

"The strong fundamental indicators of the Russian economy - such as GDP growth, minimal inflation, lower rates, a stable exchange rate," are added to specific sectors and projects, where companies demonstrate double-digit growth, "he explained.

Подробнее на ТАСС:
http://tass.ru/ekonomika/4984648

http://rusinvestforum.org/en/news/itogi-raboty-rossiyskogo-investitsionnogo-foruma-v-sochi-2018/

Russia signed agreements worth of about 790B Rubles during the Russian investment forum in Sochi.

Russian budget earns $924.5 mln from investments of Reserve Fund, NWF in 2017

MOSCOW, February 27. /TASS/. Total revenues of the Russian budget from investment of resources of the Reserve Fund and the National Wealth Fund (NWF) into authorized financial assets totaled 51.49 bln rubles ($924.5 mln) in 2017, the Finance Ministry said on Monday.

The federal budget earned 0.652 bln rubles ($11 mln) from investment of the Reserve Fund resources and 50.84 bln rubles ($912 mln) from investment of the NWF resources, the ministry said. Particularly, interest on foreign currency accounts in the Bank of Russia amounted to 0.646 bln rubles ($11.6 mln), and revenues from investment in other financial assets totaled 50.19 bln rubles (901 mln).

Total returns from depositing resources of the Reserve Fund and the National Wealth Fund at currency accounts with the Bank of Russia was minus 0.10% per annum last year due to negative dynamics of price quotes of foreign public bonds and the intention of investors to refocus on less risky and more profitable markets amid a global economic upsurge, the report said.

Meanwhile, since its foundation the returns of Russia’s Reserves Fund has reached 1.33% per annum in the currency basket and 13.49% per annum in rubles, the ministry added.



More:
http://tass.com/economy/991705

Interesting if this infra spending news is true

Putin Has to Find a Way to Raise Incomes

https://www.bloomberg.com/view/articles/2018-02-20/vladimir-putin-may-goose-russia-s-economy-before-the-elecvtion

Austin wrote:Interesting if this infra spending news is true

Putin Has to Find a Way to Raise Incomes

https://www.bloomberg.com/view/articles/2018-02-20/vladimir-putin-may-goose-russia-s-economy-before-the-elecvtion

Bloomturd trying to spread its tinfoil hat conspiracy theory drivel.

Anyone paying attention would have noted the massive infrastructure spending in Russia during Putin's terms in office. Unlike in the
west, Russia needs a lot of infrastructure development so this is a robust way of developing the country and growing its economy.
It is far from being an election time gimmick.

Also, who are Putin's opponents that he is "desperate" to win over the electorate? Putin is super popular in Russia since he has delivered
a massive standard of living increase (500%) since 2000. He does not run gulags and engage in social engineering. By contrast, his
Washington sponsored opponents are all pimping big plans to f*ck Russia over. Navalny actually runs around calling the Yeltsin years
as the "golden age". It was golden only for the gangster oligarchs. For 99.99999999% of Russians it was about impoverishment.

The Russian Foreign Ministry commented on the possibility of using the crypto currency "El Petro"
https://ria.ru/economy/20180226/1515306664.html

BEIJING, Feb. 26 - RIA Novosti. The new Venezuelan crypto currency "petro" should be carefully studied before talking about the possibilities of its use by Russia, the director of the Latin American department of the Russian Foreign Ministry Alexander Schetinin told reporters on Monday.

"Let's first see how this mechanism works, I know that very active contacts are now going on with our financial departments in Moscow and in Caracas, I think that now it is very important in these conditions to ensure a reliable mechanism, in particular financial cooperation, its concrete directions, "the diplomat answered the question whether Russia is ready to consider the possibility of using Petro.

According to him, "specialists should study and see how it fits into the realities that exist in our countries.".[/b]

Shchetinin is in Beijing within the framework of regular Russian-Chinese inter-MFA consultations on the Latin American issues. The Chinese side was represented at the talks by the Director of the Department of Latin America and the Caribbean, Ministry of Foreign Affairs of the People's Republic of China, Zhao Bengtang.

Preliminary sales of crypto-currency "petro" reached $ 735 million
Venezuela released its petroleum-backed crypto currency "Petro on Feb. 20. At the same time, President Nicolas Maduro said that the volume of pre-sales of Petro reached $ 735 million, thus becoming the first country with its own crypto currency, which is supported by oil reserves." Maduro later declared , that foreign investors' interest in transactions with Petro already exceeded $ 1 billion, while countries such as Colombia, Brazil, Japan, China, Palestine, Spain, Saint Vincent and G have shown interest in the new crypto currency. enadiny.
Maduro reminded that Venezuela can use "petro" for international transactions. The cost of one "petro" is equated by the authorities to the cost of a barrel of Venezuelan oil. Maduro also ordered the start of registration of all consular services in the embassies of Venezuela around the world in Petro, and also approved the proposal to buy fuel for Petro for aircraft. In the future, he said, Petro should also be used when paying for tourist services.

РИА Новости https://ria.ru/economy/20180226/1515306664.html

Austin wrote:Interesting if this infra spending news is true

Putin Has to Find a Way to Raise Incomes

https://www.bloomberg.com/view/articles/2018-02-20/vladimir-putin-may-goose-russia-s-economy-before-the-elecvtion

Well well well finally Keynesian policy returns? Glazyev could be proud But for the other hand how Bloomberg correspondent, a freelance one - knows what ministers proposed to Putin?!

kvs wrote:

Austin wrote:Interesting if this infra spending news is true

Putin Has to Find a Way to Raise Incomes

https://www.bloomberg.com/view/articles/2018-02-20/vladimir-putin-may-goose-russia-s-economy-before-the-elecvtion

Bloomturd trying to spread its tinfoil hat conspiracy theory drivel.

hehe but I do not think this was Austin's idea behind that. Rather about possibility of investing borrowed money in infrastructure to boost economy growth.




For the development of infrastructure is not enough to increase the national debt, according to Shokhin

MOSCOW, Feb. 27 (RIA Novosti). The head of the Russian Union of Industrialists and Entrepreneurs, Alexander Shokhin, believes that only increasing the state debt for the implementation of infrastructure projects is not enough, it is necessary to maintain regulatory and tax conditions for the entire period of investment projects.

РИА Новости https://ria.ru/economy/20180227/1515397124.html

kvs wrote:Bloomturd trying to spread its tinfoil hat conspiracy theory drivel.

GunshipDemocracy wrote:But for the other hand how Bloomberg correspondent, a freelance one - knows what ministers proposed to Putin?!

It's called "Kremlinology".

Don't worry, Western Russia experts just know this stuff. The objective, free and independent mainstream media calls them experts for a reason. /s

Needless to say, the author doesn't like Putin's ""regime"" (aka ""Putin's Russia"" or ""Putlerreich""). He's one of those West worshipping "liberals" who "defected" to the land of milk and honey. But the article isn't all bad, and by their standards (Russian anti-establishment liberals and the Western MSM as a whole), he's clearly not a total nutcase, at all. Which is of course not a huge achievement, but still.

But for the other hand how Bloomberg correspondent, a freelance one - knows what ministers proposed to Putin?!

Western media mantra... never let things like facts get in the way of a story...

BTW Avon, the US company, is closing up shop in New Zealand and Australia, and they are moving into the Russian market... it is pretty clear they see a better future there than here... of course Russia is a much bigger market but even with problems regarding sanctions they still think they have more of a future in Russia than in Australia and New Zealand....

The plan of President Putin

https://rg.ru/2018/03/01/stenogramma-vystupleniia-vladimira-putina-pered-federalnym-sobraniem.html

USC signed the largest contract for the construction of ships in decades
Vedomosti01-Mar- 7: 38
Listen to this material

https://www.vedomosti.ru/business/news/2018/03/01/752501-osk-sudov

The United Shipbuilding Corporation ( USC ) and the Samara company Volgotrans signed an agreement on the intent to build 32 cargo ships. The project, designed for 7-10 years, should begin already in the first quarter of 2018 and will become the largest for the last several decades , the USC said. The order will be distributed between the shipyards of the corporation.

" USC undertakes to build a series of 22 chemical tankers of the river-sea class with a deadweight of 5000-7900 tons and 10 dry cargo vessels of the river-sea class with a deadweight of 5000-7500 tons," the report said. The project will be implemented under the program of leasing of marine and river civil vessels of USC with the involvement of its own company Goznak-Leasing. It is also possible to use the mechanism of a recycling grant and other financial instruments.

Now the fleet of Volotrans includes about 20 vessels, the main charterer is Rosneft , industry sources say.

Since 1998

Austin wrote:The plan of President Putin

https://rg.ru/2018/03/01/stenogramma-vystupleniia-vladimira-putina-pered-federalnym-sobraniem.html

Alexander Mercouris' analysis:

http://russiafeed.com/putins-state-of-the-union-address-charting-course-for-modern-russia/

As I already mentioned on Anatoly Karlin's blog, I think it's possible there was potentially a mistake or something, and Putin didn't actually promise a 50% per capita growth by 2025 (which would require extremely high growth rates, something like 7% annually), but instead by the end of the next decade. Sounds much more plausible, and that kind of growth would still be impressive.

Austin wrote:Since 1998

But Western media keeps telling us how Putin is actually a terrible leader...

(Yeah, I know, the standard line is that it was only due to high oil prices, which is obvious BS in so many ways... Oil was probably never more than 20-25% of Russia's total GDP, today much less than that.)

Kimppis wrote:
As I already mentioned on Anatoly Karlin's blog, I think it's possible there was potentially a mistake or something, and Putin didn't actually promise a 50% per capita growth by 2025 (which would require extremely high growth rates, something like 7% annually), but instead by the end of the next decade. Sounds much more plausible, and that kind of growth would still be impressive.
)

I am sure many things of this plan was already worked out long time ago. MEdvedev took part of doing not popular stuff so haters will focus on him. However if Vova wouldn't need him he'd not stay so long.

Interesting is that if thsi is true I wonder how much PPP would change. If PPP/nominal rate stays roughly on same level We'd see Russia ahead of Japan (Russia ~ 4 trillions USD Japan 5,4 trillios) THAT would be a game changer. But I guess without pretty massive professionals' immigration it wont work that good in long term.

To me Russia could try to attract 1million of skilled young people per year. Or ensure Ukrainians will like to join Russia on her terms ( 25-30millions + population in one move

Austin wrote:Since 1998

Poland and Ireland experienced GDP growth due to massive foreign investment. Russia's growth was driven almost entirely by domestic
factors. This implies that Russia's GDP growth is much more robust and stable than that of Poland and Ireland.

This gets back to the detail missed by all the pundits and "economists" who only looked at Russia's export profile and "missed" the
fact that its imports profile indicates that it produces most of the products it needs domestically. So while it is popular in the
precious, idiot west to call Russia an "Upper Volta with nukes" aka banana republic, it is the total opposite. Banana republics
import 100% of everything aside from the bananas (or whatever commodities they depend on).

Russia’s Awesomely Hawkish Ministry of Finance Has Broken the Country’s Addiction to Oil

In the boom years Russia needed oil prices at at $115 to stay in the black. Now it's fine with $54... Ben Aris 4 Mar 18

Moscow – the home of fiscal hawks

After several years of losing money, Russia’s government went into profit again in January running a RUB190bn ($3.4bn), or 2.8% GDP surplus. The crisis of the last years forced Russia to go cold turkey and has finally broken its addiction to oil.

In the boom years the Russian budget needed oil prices to be more than $115 per barrel to make a profit, but since then cost cutting, a crack down on corruption and an unsung revolutionary reform to the tax system – there has been massive investment into a state-of-the-art tax service IT system that have increased revenues by 40% — means as bne IntelliNews has reported Russia Inc went into the black in 2017 as the break even price has fallen to $53 a barrel, according to Oleg Kouzmin, chief economist for Russia at Renaissance Capital. The average price for oil in 2017 was $55.44 and so far this year the average price in January was up to $66.23.

The surplus was helped by higher oil prices, but the crisis has lead to a huge shake up of the tax system, which is working more efficiently and expanded its sources of revenues.

Consolidated budget revenues (federal, regional and municipal, plus social funds) increased by over 13% y/y. Higher oil prices helped increase revenues via oil & gas tax income (up 23%) whose share rose to close to a fifth of total budget revenues, but this is still way down on the 50% it used to be.

“The tax system reforms have lead to other budget revenues to rise by 10%, which is rapid even if the data was adjusted for inflation. Revenues from corporate profit taxes and goods excise taxes rose especially fast,” Bank of Finland Institute for Economies in Transition (BOFIT) says.

Budget spending also grew but at a more modest pace, up by 6% in January y/y. Most of this went into social security spending, which rose to over 10% and the share increased to over 36% of total budget spending. But serious savings were made by cutting back on military spending, which has skewed the budget for most of the last few years towards a deficit.

However, the biggest change to the budget has been the re-introduction of the so-called budget rule since the start of January. This dictates that any revenue earned from oil exports when the price of oil is over $40 must be squirreled away in the sovereign reserve fund. The practical impact of this rule is the link between the ruble exchange rate and oil prices gets broken as oil can’t rise above $40 as far as the currency is concerned.

It also means Russia will start accumulating gross international reserves (GIR) again: reserves were already up to $450bn in January from a April 2015 low of $356bn. However, as far as the Ministry of Finance is concerned the real benefit is the budget rule will put a floor under the wild swings the Russian economy has always been prone to; Russian Finance Minister Anton Siluanov says he wants to build a “second Norway.”

The Russian government will do what needs to be done to stay in the black — whatever that may be. Something totally unheard of in the US

“We have got stability now,” Siluanov said at during the Gaidar forum in January. “But we have to go beyond that. The growth and the fall of the deficit is welcome but what it brings is not just stability, but predictability. That is the point of the budget rule; its not there to accumulate reserves. Its there to increase the predictability of the economy for business and for investors.”

http://www.checkpointasia.net/russias-awesomely-hawkish-ministry-of-finance-has-broken-the-countrys-addiction-to-oil/?utm_campaign=shareaholic&utm_medium=twitter&utm_source=socialnetwork

uhm, budget is set at $40bbl

So its less than stated on what they are good with.

Glazyev believes that Russia's economy can grow by 8% per year

Adviser to the President of the Russian Federation Sergey Glazyev considers it possible to reach the growth rate of the Russian economy at 8% per year, he told RNS. This will make it possible to fulfill the task of increasing GDP per capita by 1.5 times by the middle of the next decade, put by Vladimir Putin in a message to the Federal Assembly.

"It is absolutely feasible, you just need to give loans to the economy. On objective opportunities, our economy can grow at a rate of about 8% per year. We do not have enough loans for working capital, but we have production facilities that can produce now 1.5 times more products than is produced, and modern production facilities. And there is an opportunity to increase labor productivity by 1.5 times, even with the existing level of people's skills due to increased capacity utilization. The most important thing is the intellectual reserve, the potential and our scientific and technical capabilities, which are currently used by no more than 10%. That is, we can objectively develop at a rate of 8% per year, multiply by 6 by the method of compound interest, and the task is 1.5 times absolutely real. It can even be overfulfilled, "he said.

According to Glazyev, the fulfillment of the task set by the president is possible with "competent macroeconomic policy".

"It's just necessary to bring monetary policy in line with the requirements of the country's development, and not with the recommendations of the International Monetary Fund. Only through the normalization of monetary policy in accordance with the universal principles of organization of credit, including the number of long-term loans, you can go to this growth, "- summed up Glazyev.

The day before, Russian President Vladimir Putin, during a message to the Federal Assembly, announced that by the middle of the next decade Russia should increase GDP per capita by 1.5 times.

"Russia should not only firmly gain a foothold in the five largest economies of the world, but by the middle of the next decade to increase GDP per capita by 1.5 times. This is a very difficult task. I'm sure we are ready to solve this problem, "Putin said.

Former Finance Minister, chairman of the Center for Strategic Research Alexei Kudrin later said that to achieve the goal set by Putin, it is possible only at a rate of economic growth of 6% per year.

"When the president said that GDP growth of 1.5 times per capita by the middle of the decade, that is, by 2024-2025, this means an average GDP growth rate of about 6%," Tass quotes him.

They say a man with bow does not lie , Read what Jim Grant has to say on Interest rates

Jim Grant's Interest Rate Observations and market outlook

Austin wrote:Glazyev believes that Russia's economy can grow by 8% per year

Adviser to the President of the Russian Federation Sergey Glazyev considers it possible to reach the growth rate of the Russian economy at 8% per year, he told RNS. This will make it possible to fulfill the task of increasing GDP per capita by 1.5 times by the middle of the next decade, put by Vladimir Putin in a message to the Federal Assembly.

"It is absolutely feasible, you just need to give loans to the economy. On objective opportunities, our economy can grow at a rate of about 8% per year. We do not have enough loans for working capital, but we have production facilities that can produce now 1.5 times more products than is produced, and modern production facilities. And there is an opportunity to increase labor productivity by 1.5 times, even with the existing level of people's skills due to increased capacity utilization. The most important thing is the intellectual reserve, the potential and our scientific and technical capabilities, which are currently used by no more than 10%. That is, we can objectively develop at a rate of 8% per year, multiply by 6 by the method of compound interest, and the task is 1.5 times absolutely real. It can even be overfulfilled, "he said.

According to Glazyev, the fulfillment of the task set by the president is possible with "competent macroeconomic policy".

[]

Former Finance Minister, chairman of the Center for Strategic Research Alexei Kudrin later said that to achieve the goal set by Putin, it is possible only at a rate of economic growth of 6% per year.

"When the president said that GDP growth of 1.5 times per capita by the middle of the decade, that is, by 2024-2025, this means an average GDP growth rate of about 6%," Tass quotes him.

Glazyev isright in that economy needs money. However moeny is not all, otherwise neither India nor China grew so fast with higher interest rates. CBR started now decreasing % , banks with "leking capital" are being closed one by one, legal basis changed in terms of easines to make business. hat I dont like is all this privatization stuff. I guess Putin didnt tell us the lst word yet

miketheterrible wrote:uhm, budget is set at $40bbl

So its less than stated on what they are good with.

My take on this is that the author is saying, that the Russian government was pressed to raise enough overall tax dollars when the oil prices were $115, but through tax and economic reform are now quite comfortable with overall taxes raised in a year the oil prices averaged only $54.

franco wrote:............
However, the biggest change to the budget has been the re-introduction of the so-called budget rule since the start of January. This dictates that any revenue earned from oil exports when the price of oil is over $40 must be squirreled away in the sovereign reserve fund. The practical impact of this rule is the link between the ruble exchange rate and oil prices gets broken as oil can’t rise above $40 as far as the currency is concerned.........

And this my friends is how you run economy

The problem is that in any western country all the oil business is privatised so all the revenue goes into the pockets of the owners... the 1% get more 1%ish.

Personally I think oil and similar such resources under the feet of the people belongs to the people and despite a bit of mismanagement by Government the decisions and profits should go to the people and not a few already wealthy individuals.