Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Stock Market SEASONAL TREND and ELECTION CYCLE - 24th Nov 20
Amazon Black Friday - Karcher K7 FC Pressure Washer Assembly and 1st Use - Is it Any Good? - 24th Nov 20
I Dislike Shallow People And Shallow Market Pullbacks - 24th Nov 20
Small Traders vs. Large Traders vs. Commercials: Who Is Right Most Often? - 24th Nov 20
10 Reasons You Should Trade With a Regulated Broker In UK - 24th Nov 20
Stock Market Elliott Wave Analysis - 23rd Nov 20
Evolution of the Fed - 23rd Nov 20
Gold and Silver Now and Then - A Comparison - 23rd Nov 20
Nasdaq NQ Has Stalled Above a 1.382 Fibonacci Expansion Range Three Times - 23rd Nov 20
Learn How To Trade Forex Successfully - 23rd Nov 20
Market 2020 vs 2016 and 2012 - 22nd Nov 20
Gold & Silver - Adapting Dynamic Learning Shows Possible Upside Price Rally - 22nd Nov 20
Stock Market Short-term Correction - 22nd Nov 20
Stock Market SPY/SPX Island Setups Warn Of A Potential Reversal In This Uptrend - 21st Nov 20
Why Budgies Make Great Pets for Kids - 21st Nov 20
How To Find The Best Dry Dog Food For Your Furry Best Friend?  - 21st Nov 20
The Key to a Successful LGBT Relationship is Matching by Preferences - 21st Nov 20
Stock Market Dow Long-term Trend Analysis - 20th Nov 20
Margin: How Stock Market Investors Are "Reaching for the Stars" - 20th Nov 20
World’s Largest Free-Trade Pact Inspiration for Global Economic Recovery - 20th Nov 20
Dating Sites Break all the Stereotypes About Distance - 20th Nov 20
THE STOCK MARKET BIG PICTURE - Video - 19th Nov 20
Reasons why Bitcoin is Treading at it's Highest Level Since 2017 and a Warning - 19th Nov 20
Media Celebrates after Trump’s Pro-Gold Fed Nominee Gets Blocked - 19th Nov 20
DJIA Short-term Stock Market Technical Trend Analysis - 19th Nov 20
Demoncracy Ushers in the Flu World Order How to Survive and Profit From What Is Coming - 19th Nov 20
US Bond Market: "When Investors Should Worry" - 18th Nov 20
Gold Remains the Best Pandemic Insurance - 18th Nov 20
GPU Fan Not Spinning FIX - How to Easily Extend the Life of Your Gaming PC System - 18th Nov 20
Dow Jones E-Mini Futures Tag 30k Twice – Setting Up Stock Market Double Top - 18th Nov 20
Edge Computing Is Leading the Next Great Tech Revolution - 18th Nov 20
This Chart Signals When Gold Stocks Will Explode - 17th Nov 20
Gold Price Momentous ally From 2000 Compared To SPY Stock Market and Nasdaq - 17th Nov 20
Creating Marketing Campaigns Using the Freedom of Information Act - 17th Nov 20
ILLEGITIMATE PRESIDENT - 17th Nov 20
Stock Market Uptrend in Process - 17th Nov 20
How My Friend Made $128,000 Investing in Stocks Without Knowing It - 16th Nov 20
Free-spending Biden and/or continued Fed stimulus will hike Gold prices - 16th Nov 20
Top Cheap Budgie Toys - Every Budgie Owner Should Have These Safe Bird Toys! - 16th Nov 20
Line Up For Your Jab to get your Covaids Freedom Pass and a 5% Work From Home Tax - 16th Nov 20
You May Have Overlooked These “Sleeper” Precious Metals - 16th Nov 20
Demystifying interesting facts about online Casinos - 16th Nov 20
What's Ahead for the Gold Market? - 15th Nov 20
Gold’s Momentous Rally From 2000 Compared To Stock Market SPY & QQQ - 15th Nov 20
Overclockers UK Quality of Custom Gaming System Build - OEM Windows Sticker? - 15th Nov 20
UK GCSE Exams 2021 CANCELLED! Grades Based on Mock Exams and Teacher Assessments - 15th Nov 20
Global "Debt Mountain": Beware of This "New Peak" - 13th Nov 20
Overclocking Zen 3 Ryzen 5600x, 5800x, 5900x and 5950x to 4.7ghz All Cores Cinebench R20 Scores - 13th Nov 20
Is Silver Leading Bitcoin or is Bitcoin Leading Silver? - 13th Nov 20
How Elliott Waves Simplify Your Technical Analysis - 13th Nov 20
How to buy Bitcoins using debit/credit card? - 13th Nov 20
Will COVID Vaccine Kill Gold and Silver? - 12th Nov 20
Access to Critical Market Reports - 12th Nov 20
Stock Market Dow Futures Reach 30,000 on News of COVID-19 Vaccine Trials Success - 12th Nov 20
8 Terms & Conditions You Must Know Before Asking For Life Insurance Policy Quotes - 12th Nov 20
Gold Stocks Post 2020 US Election Outlook - 11th Nov 20
Champions’ League Group Stage Draw: All You Need To Know - 11th Nov 20
Stock Market Secular Trend - 11th Nov 20
Stock Market Correction Curtailed by US Election - 11th Nov 20
What Causes a Financial Bubble? - 11th Nov 20
Ryzen 9 5900X RTX 3080 - Scan.co.uk vs Overclockers.co.uk UK Custom PC System Builder Review - 10th Nov 20
Killing Driveway Weeds FAST with a Pressure Washer - Saving Block Paving from LOTS of WEEDs - 10th Nov 20
Trump Fired, Biden Hired, What Next?  - 10th Nov 20
Looking for a Personal Loan? Here Is What You Have To Know  - 10th Nov 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Russian Economy to Fall into Abyss?

Economics / Russia Aug 17, 2013 - 10:41 AM GMT

By: Pravda

Economics

Experts are debating whether Russia's economy has slipped into a recession or whether it is "safely" stagnant. The difference between stagnation and recession is of insignificant technical nature. However, the dispute over the terminology also has a political dimension, and for that reason it was joined but such heavyweights as Alexei Ulyukayev, the Economic Development Minister, who argues that the economy is stagnating.


We can say with absolute certainty that the country's economy is gradually but steadily slowing down. This process has been ongoing since 2011 and it looks like this is the moment when the raw materials locomotive is on the verge of a full stop, or even a rollback.

On Friday, the Federal State Statistics Service released data on the dynamics of the gross domestic product (GDP) in the second quarter of 2013. The index rose by 1.2 percent in annual terms. In the second quarter of 2012, GDP growth was 4.3 percent compared to the same period in 2011. In the first quarter of 2013, GDP growth slowed down to 1.6 percent.

Also on Friday, Deputy Economic Development Minister Andrei Klepach told Prime agency that the experts of the ministry were still hoping for a positive trend in the third quarter. He acknowledged that the information on preliminary estimate of economic growth in the second quarter published by Rosstat was worse than expected. In April, the Ministry expected growth of 2.1 percent in the second quarter. The adjusted April forecast of the Ministry for GDP growth for the year was 2.4 compared to the previously projected 3.6 percent.

So far the Ministry is not revising its forecast for the third quarter that reflects the expected growth of 2.5 percent. But the weak dynamic of the previous months leaves little chance of achieving this result. According to some leading indicators, the economy is falling. PMI index of business activity published last week by HSBC dropped below 50 points, which is a sign of an economic downturn.

Late in the week an international research firm Capital Economics stated that based on the result of the first six months of the year, the Russian economy entered into a recession. Since there is no final data from Rosstat as of yet, we can assume that we will see a classic recession, that is, the decline in the economy for two consecutive quarters. There are no doubts that the Rosstat and economic institutions will put off the statement of this unpleasant fact for as long as possible. They understand better than anyone else that the slow growth due to the increase in oil prices and the growth of mining has been exhausted.

"There is no recession. There will be no recession. Stagnation is probably a better term. The growth rates are very low; this is an institutional, structural, macroeconomic factor. This is something we will have to deal with for a very long time," said Economic Development Minister Alexei Ulyukayev in an interview with Prime.

The official suggested a timely revision of the forecasts that would take into account the outlook for global growth and competitiveness of the Russian economy. Ulyukayev did not rule out the revision of "Strategy 2020." "Without major changes in the institutional environment it is difficult to count on the fact that we will grow much higher than the rest of the world on average," said the Minister.

Experts of Capital Economics confirm that weak GDP dynamics is associated with a fall in consumption and investment. Opportunities for maneuvers in the short term exist only at the level of monetary actions. For example, a reduction in the rate of inflation may have a positive impact on real incomes and increased consumer spending.

However, this option seems too abstract. The most important factor that provokes inflation is an increase of tariffs due to the policy of the natural monopolies that limit them only in words. The planned inflation for the year is 5.6 percent. Since the beginning of the year through August the inflation has reached 4.5 percent, which means that it is unlikely that it will be kept within the stated limits through the end of the year.

The growth of budget expenditures could extend positive statistics, but according to the treasury, the general budget expenditures have declined by 1.4 percent to 5.9 trillion rubles. The income plan has been implemented by 48.6 percent of the forecast for the year, which is also not a good indicator.

Anatoly Miranovsky

Pravda.ru

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Pravda Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules