Economy of the Russian Federation

sgarg

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@sgarg

Who is this person, you talk about, who made this prediction. I would like to see his reasoning.

Though I admit wiping off US as a country is not difficult. It is difficult for an Indian because Indians habitually are anti-destruction oriented. But it would not at all be difficult for a committed fellow like a Putin or a well endowed fellow like Xi Jinping.
You will meet him in your lifetime if you make a serious wish. Name is not important.
 
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Khagesh

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But that is the problem. US has been successful in making Ukrainians and Russians fight each other to death. This is typical imperialist behavior.

It is true that Russians are never going to let go of this fight. I don't see this fight ending even after the West and East Ukraine are partitioned. West is merely being mule headed. They are trying to fry a bomb for their breakfast. They don't have the liver to digest this bomb :lol:.
 

sorcerer

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Russia will ran out of money before it can reach any of it´s geopolitical goals like you said. They are already trying to move away from Gas deal they signed with China few months ago. Russia just is too small player... It has economy the size of Italy and ambitions a size of The US... they just do not mach. Sorry.
:D
http://rt.com/business/243129-russian-economy-markets-recovery/

Global investors appear to be optimistic about the future of Russian corporations, as the country's economic performance provides evidence to recovery, says Bloomberg analyst Matthew Winkler in his article.

Those who invested in ruble-denominated government securities this year have already made a profit equivalent to seven percent in dollar terms, while those who invested in government bonds of other developing countries lost more than one percent from January, he says. The holders of corporate bonds gained even more with a 7.3 percent return in 2015, which leads the index for emerging market corporate bonds compiled by Bloomberg.

The 50 Russian stocks in the MICEX are up 11.9 percent this year, which is better than any North American market, and that, according to analysts, shows confidence is starting to return.
U.S. faces meager options for further Russia energy sanctions | Reuters
(Reuters) - The United States will struggle to follow through on threats to impose deeper sanctions on the Russian energy sector , as European fears :D over collateral economic damage leave President Barack Obama's administration with diminished options.

Russia could respond by squeezing the gas exports on which Europe relies heavily.

"If you start playing around with oil prices, Russia is going to play around with gas, and there's no way Europe is going to go along with it," said Carlos Pascual, who until last August was the top energy diplomat at the U.S. State Department.

Seriously,, its a "COLD" war for you Europeans if energy fails!!

you believe in NATO lies set by the clown Philip Breedlove (I seriously hope these kind dont breed any more!)
NATO commander: West must fight Russia in information 'war' - US News
 

jouni

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Siloviki Are Bankrupting Russia
By Konstantin SoninMar. 22 2015 18:04 Last edited 18:05

Sergei Nikolaev / Vedomosti
Some economic policy questions can be resolved at the ministry level. Others require the efforts of several agencies and, accordingly, are solved at the level of the prime minister. However, there are also economic problems that not even the combined efforts of the Russian prime minister, president and parliament can resolve.

For example, Russia spends far too much money on the military and various security structures, but the siloviki have so much influence in economic policy that the political system, as it is now stands, is powerless to change the situation.

I am in no way blaming the military brass or intelligence officials for the problem.

It is only natural that each department places its own needs as a top priority, deserving more state funding than others. The problem is that Russia's political system permits the siloviki to set not only their own budgets, but the financial parameters for other government agencies as well.

It is no coincidence that in most economically developed countries the finance minister is a more important and influential figure than the defense minister, not to mention the heads of security agencies.

The siloviki play a disproportionately large role in governing Russia and forming policy, either indirectly — when former FSB agents and the like hold senior positions, right up to the presidency itself — or directly, through, for example, decisions made by Russia's Security Council.

To get a sense of the imbalance, imagine if a group of former health care workers set the country's economic policy according to their own set of priorities. The result would be absurd, to say the least.

This would all be just abstract theory were it not for the sad example of Russia's own recent history.

In the 1980s, the Soviet Union spent almost one-fourth of its gross domestic product on defense-related expenses, and also devoted enormous financial and human resources to "internal security."

Even at the time, it was well understood that the economy could not continue in such a way.Defense expenditures for the production of pointless weapons and equipment that added nothing to people's well-being only diverted needed resources away from truly productive industries.

Soviet economists understood the problem that was crippling the economy, and politicians at least claimed to, but the military, defense industry and intelligence agency representatives in senior government positions held so much influence that they stymied any significant spending cuts or changes in how and where the money was being spent.

As a result, military spending finally decreased only when the country slid into the economic disaster that led to the collapse of the Soviet Union.

This does not mean that modern Russia will necessarily suffer the same fate, but it does prove that, even in the absence of an external threat, a country that spends too much on defense and security at the expense of other sectors can end in collapse.
Siloviki Are Bankrupting Russia | Opinion | The Moscow Times
 

jouni

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:D
http://rt.com/business/243129-russian-economy-markets-recovery/


U.S. faces meager options for further Russia energy sanctions | Reuters



Seriously,, its a "COLD" war for you Europeans if energy fails!!

you believe in NATO lies set by the clown Philip Breedlove (I seriously hope these kind dont breed any more!)
NATO commander: West must fight Russia in information 'war' - US News
Ukraine just announced that it will stop importing gas from Russia. It gets it cheaper from Europe. That is quite an omen.
 

sgarg

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Good. Anything which makes Ukraine pay for gas is good for Russia. Far better than stealing gas from the the pipes.

As for siloviki, I doubt the majority will question it in the current times when "west" is killing Russian speakers with such merriment.

The bombardment of urban settlements by Kiev regime is the biggest factor which will drive this war, and will push even more Ukrainians to the separatist side.
 

santosh10

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Russian Economy in Short

I think, the economy of Russia is described in few point as below:

1st; Debt to GDP ratio among the lowest in world, (something which matters the most in Today's world)
//cdn.static-economist.com/sites/default/files/imagecache/original-size/t1-overall_0.png
2nd; Foreign Reserve at over $500billion+, the 3rd largest in world

3rd; Per Capita Income on PPP exceeding $25,000 which handsomely put it among the developed countries....
//data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD
4th; Growth rate itself not bad, as compare to EU, as below :ranger:
tradingeconomics.com/russia/gdp-growth-annual
Finland and other EU's member are more or less as below
tradingeconomics.com/finland/gdp-growth-annual
in sum, with hefty resources already, i would say them having the most resource rich country of world, hence i see Russians having the most bright economic future in world :thumb:
.

=> along with maintaining the most powerful Military in EU, ..... Russians do have got enough from their past generations, wealth and proud both :ranger:
globalfirepower.com/
 
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jouni

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Russian Economy in Short

I think, the economy of Russia is described in few point as below:

1st; Debt to GDP ratio among the lowest in world, (something which matters the most in Today's world)


2nd; Foreign Reserve at over $500billion+, the 3rd largest in world

3rd; Per Capita Income on PPP exceeding $25,000 which handsomely put it among the developed countries....


4th; Growth rate itself not bad, as compare to EU, as below :ranger:


Finland and other EU's member are more as below


in sum, with hefty resources already, i would say them having the most resource rich country of world, i see Russians having the most bright economic future in world :thumb:
.

=> along with maintaining the most powerful Military in EU, ..... Russians do have enough from their past generations :ranger:
Glad to see you so positive! That is what world needs in these times!
 

sorcerer

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Ukraine just announced that it will stop importing gas from Russia. It gets it cheaper from Europe. That is quite an omen.
Demchyshyn added that a new agreement would be signed on April 13-14 concerning purchases of Russian natural gas. "A decision [on buying Russian gas after April 1] has technically been formulated and I think it'll be signed on April 13 or 14," he said.

Ukraine would like for the agreement to last until summer 2016, Demchyshyn added.

He noted that it would be easier to agree with Russia on the price of gas in the second and third quarters, which is connected with lower demand in the summer period.

- Ukraine to halt Russian gas purchases on April 1 | Russia Beyond The Headlines)
Ukraine to halt Russian gas purchases on April 1 | Russia Beyond The Headlines

It didnt stop importing from Russia..its a phase out on deal till a new deal is signed :D
 

santosh10

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Glad to see you so positive! That is what world needs in these times!
look Jouni

this is the section discussing "Economy of Russia", and here, its not about saying that Japan has the highest Debt, which is then followed by UK in terms of Total Debt, which includes government+household+business etc, last post#155..... even if i have been supporting Japan always, as since my schooling itself

its more about shortlisting few key Economic Indicators of Russia, as per topic of this thread, only.....

i mean, its not about saying wrong or right about Russia or Japan/UK, but its more about a response to this thread. i have been more willing to see Finland and Russia come together in future, as i have said here many times before too :thumb:
 
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Cadian

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Russia Rebounds, Despite Sanctions
467 MAR 20, 2015 11:39 AM EDT
By Matthew A. Winkler

Sanctions meant to punish Russia for snatching Crimea from Ukraine one year ago were supposed to hurt Russian business. And they did. Russian stocks, bonds and commodities had the worst performance in 2014 of those in any emerging market.

That was then. Now the picture is changing, with investors starting to favor Russia in 2015. The ruble, which became the world's most volatile currency last year after President Vladimir Putin's land grab, is stabilizing. The swings in its value narrowed this year more than any of the other 30 most-traded currencies.



Investors in Russian government securities denominated in rubles have earned the equivalent of 7 cents on the dollar so far this year, as measured by the Bloomberg Russia Local Sovereign Bond Index. In contrast, anyone holding similar government debt in emerging markets across-the-board has lost 1.1 percent in 2015.

The picture is even rosier for Russia's corporate bondholders; they've had a 7.3 percent total return in 2015, leading the gains in the index for emerging market corporate bonds compiled by Bloomberg. And while shareholders in the global emerging market stocks measured by the MSCI Emerging Market Index gained 1.7 percent this year, the 50 Russian stocks in the Micex index are up 11.9 percent -- better than the Standard & Poor's 500 or any other North American market.

The ruble's relative value helps explain why there are some signs of confidence in Russia. Although the ruble remains the most volatile of the 31 most-traded currencies this year, its swings are narrowing. This is visible in implied volatility, a measure of traders' bets on how much the currency's value will change day-to-day. After surging in late 2014 amid the widening Ukraine crisis, the ruble now is fluctuating the way it did in 2009.



Business also appears to be on the rebound. Some 78 percent of the Russian companies in the Micex index showed greater annual sales growth than their global peers, even though the shares of these Russian companies lagged behind their international competitors, according to data compiled by Bloomberg. That's consistent with a two-year improvement in the relative value of Russian companies.

One possible reason for the growth? Sanctions. With foreign goods unavailable, Russians had to choose homegrown products and services.

For all the disruption caused by the sanctions, Russian companies represented in the Micex index are more profitable measured by Ebitda margins (earnings before taxes, depreciation and amortization) than the rest of the companies included in the global MSCI Emerging Market Index.

A number of Russian companies are outperforming their global peers. Magnit PJSC, which operates a chain of discount supermarkets with a market capitalization of $16 billion, is one worth noting. The retailer's one-year revenue growth was 31.66 percent, overwhelming the 0.87 percent increase in sales from its global competitors. Novatek OAO, a $22.8 billion independent producer of natural gas in western Siberia, is another. The company saw its sales increase 19.5 percent, compared with 0.76 percent from its global sector. And then there's Rosneft, a $41 billion international brand with production in western Siberia, Sakhalin, the North Caucasus and the Arctic, which reported an 18.26 percent annual sales growth when its international competitors disclosed a revenue increase of just 0.76 percent. By any conventional measure, the shares of these companies are cheap.



Are global investors optimistic about corporate Russia's continued resilience? It seems so. The shares outstanding of the largest U.S.-based exchange traded fund tracking Russian companies -- more than 90 percent of the companies in the ETF are Russian -- surged 5 percent so far this year. At the same time, an ETF that's a proxy for money flows into and out of Russian equity shows a 27 percent increase. Putin's Ukraine adventure has led to instability in the region and frayed relations with the West; what it hasn't destroyed is confidence in corporate Russia.
Russia Rebounds, Despite Sanctions - Bloomberg View
 

sgarg

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Russia economy will do fine despite Western sanctions. The reason is very simple, West no longer wields as much economic clout as it used to.

Asia has developed to a very large degree. The situations with USSR and Russia are not comparable.

Russia is also not in a economic and military race with the West. Russia does not suffer from distortions of USSR.

Any European that draws parallel with Russia and USSR is likely to be disappointed.

Russia is a completely different ballgame, a reincarnation of the Czarist empire, an empire that was very successful in increasing its domain.
 

Cadian

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Putin's Economic Team Plays Houdini
196 MAR 27, 2015 3:25 PM EDT
By Leonid Bershidsky


Last week, the Russian central bank's currency reserves increased for the first time since last July, showing that the economy may have moved past the panic caused by last year's oil price slump. Perhaps Russia's improving indicators will convince Western governments that economic sanctions are having no discernible effect and that President Vladimir Putin's regime and the country it runs aren't facing imminent collapse.

Russia has lost a little more than a quarter of its foreign reserves since mid-July 2014:



The decline was particularly sharp last December, as the central bank frantically sought a way to stop the ruble from losing value against the dollar. The much gentler slope on the chart -- beginning in January -- says more about the structure of Russia's foreign reserves than about chronic depletion.

In January 2014, Russia held $131.8 billion of U.S. debt. As its relationship with the U.S. deteriorated after the revolution in Ukraine and the annexation of Crimea, Russia began shrinking its dollar reserves and increasing the share of euros and gold. While the reserves as a whole dropped 23.9 percent in 2014, the holdings of U.S. debt fell 37.6 percent, to $82.2 billion. Russia now holds less U.S. Treasury securities than Ireland, Turkey or Singapore.

The total value of foreign reserves is expressed in dollars, so Russia's euro-heavy stockpile took a hit from the dollar's rapid appreciation against the euro this year. The central bank no longer had to prop up the ruble with big foreign exchange sales: The currency has been doing OK so far this year, partly because oil has bounced back from January lows, and partly because Russia, with an interest rate of 17 percent at the beginning of the year and 14 percent now, became an attractive, though risky, carry trade destination. A glance at the relationship between the ruble and the price of Brent crude shows that the currency is now doing better than the oil benchmark -- that's a sign that the carry trade, in which speculators borrow in dollars and lend in rubles, is pushing it upward:



In the week ended March 20, the euro gained a little more than 3 percent against the U.S. dollar; that was the reason for the $1.2 billion uptick in Russian foreign reserves.

Many of the unfavorable forecasts for the Russian economy -- such as the one published a month ago by Anders Aslund of the Peterson Institute for International Economics -- were predicated on the melting away of currency reserves. "Russia's reserve situation is approaching a critical limit," Aslund wrote. "At present, Russia loses more than $10 billion a month, which means that a real reserve crisis will erupt in the third quarter." That, however, is not going to happen unless the price of oil starts going down steeply again.

Analysts are divided about the future of oil prices, with predictions ranging from $50 to $90 per barrel of Brent in the fourth quarter of this year. But the consensus forecast compiled by Bloomberg put it at $68.65 today -- higher than the actual price of $57.5. The Russian Economy Ministry has also suggested raising the official oil price forecast from $50 per barrel -- in line with the most pessimistic of analysts -- but the government has so far resisted these calls, preferring to remain cautious.

The current government forecast says the Russian economy will shrink 3 percent. If oil is higher than budgeted, however, the decline -- which is inevitable for structural reasons, and because of the abnormally high interest rates left over from last year's defense of the ruble and that remain useful because they attract the carry trade -- will be even less pronounced. Economists polled by Bloomberg still expect, on average, a 4 percent drop, but Goldman Sachs, for example, now predicts a decline of only 2.7 percent -- in line with some forecasts from Russian liberal economists.

To be sure, that's hardly a stellar economic performance. It's painful for a country as big as Russia to have its crucial economic indicators depend so heavily on civil strife in Yemen and the debt problems of U.S. frackers -- both important determinants of the oil price. The country's oil dependency won't end anytime soon, however, and so far Russia's key market has stabilized at an acceptable level.

So where do the Western sanctions come in? They don't. It's easy to see how Russian economic indicators react to developments in oil and foreign exchange markets, but not to the trade and funding restrictions. They are a nuisance to a number of Russian companies, but Sberbank, the mammoth state institution now unable to obtain Western funding, still reported a healthy profit of $7.7 billion for 2014. That's less than for the year before, but still far from tragic.

Russia's economic managers, especially at the Central Bank and the Finance Ministry, should be given their due: In a difficult environment, they have avoided major mistakes and managed to keep open Russia's economy. Putin has plenty of advisers who would prefer a different approach, arguing for "fortress Russia," but despite the instincts that feed the president's own siege mentality, he has chosen wisely whom to empower. Despite the Soviet revival theatrics Putin has employed -- at a recent meeting, he pointedly addressed top operatives of Russia's FSB domestic intelligence as "comrades" -- Russia remains a major market economy that cannot be derailed by a few timid restrictions.

That makes it both a bigger threat to weak neighbors such as Ukraine, as well as an underrated land of opportunity. It's not for nothing that in its 2015 investor sentiment survey, the CFA Institute -- a global association of investment professionals -- named Russia one of the top markets for equity performance this year, along with the U.S., China and India.
Putin's Economic Team Plays Houdini - Bloomberg View
 

sgarg

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@Cadian, very high interest rates are bad for growth. So Russia needs to find a balanced approach. Capital controls of some kind may be needed at some point.

Growth of small and medium enterprises is affected heavily by interest rates. Russia is weak in this area. Small and medium enterprises are the cutting edge in technological development.

Russia needs to promote an entrepreneurial culture so that economy develops in a holistic manner.
 
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amoy

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the blessing of high commodity prices has suffocated any entrepreneurial culture or SME, so to speak, nobody puts their nose to the grind when there r easy bucks to make elsewhere. all kinds of oligarchs thrive in Russia, like that tycoon Ambramovich who bought the Chelsea football club. but Russian commoners, phewwwww"¦

however Russian economy will recover for sure with oil rate bouncing back"¦ someday.

~Tapa talks: Orange is the new black.~
 

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