- Posted March 16, 2014 by
This iReport is part of an assignment:
Russia-on the way to recession
In this case a weak ruble should actually help the growth of the economy : the price of goods produced in the country in the international markets should decline, sales increase, but other than that little Russian raw material exports : oil, gas and minerals account for 90 percent of exports of manufactured goods accounted only 6 percent. But Russian companies need a lot of foreign goods prices also are rising . So that all firms except those that deal with raw materials, and suffer in the future the situation will only grow worse .
In addition, lifting the sanctions against Iran , one of the world's largest exporters of oil in the near future is able to bring down the price of oil , petroleum products and other energy that would entail predictable fall of the ruble and further impoverishment of the majority of the population of the Russian Federation .
Rosstat data on the main economic activities in January 2014 said the deteriorating situation immediately in many sectors of the economy .
In January 2014. industrial output of the Russian Federation decreased by 0.2 % compared to the same period last year. The sharp fall in investment ( 7% annualized) on the background of deteriorating situation in January in industries working on investment demand (manufacture of machinery and equipment , building materials ) , as well as in the production of vehicles that meets the long-term needs of households , allows to express the assumption of fast rolling the Russian economy out of stagnation in the recession.
During the year the ruble has fallen by 17 percent , writes journalist Holger Tsshepits , and continues to fall almost every day. This has already started to take its toll and the real economy sector . Moreover, if more recent sentiment in the country determined Sochi euphoria , then after the Olympics situation is deteriorating dramatically . At the same time a further fall in the ruble and a negative impact on the countries of the Customs Union would cause inflation and speculation on the exchange rate.
From the beginning, the ruble lost against the euro around 8 percent . In late February, the ruble against the euro in general came to a historic low . Experts believe that the fall of the ruble may cause serious damage to the economy of the Russian Federation . If market participants lose all confidence in the ruble , the capital outflow may accelerate , to prevent this , the central bank will raise interest rates , and it will be the collapse of the economy.
Negative background in investment is preserved. For the year is expected to decline by 1% of investment relative to the level in 2013 , as well as slowing retail growth - from 3.9 % in 2013 to 2.7 % in 2014 , and paid services to the population - from 2.1 to 1 , 6%. As a result , GDP growth in 2014 will be only 1.3%.
So cheap ruble and ossified economic structures contribute to a rise in price . The central bank dilemma : to stimulate the economy you need to actually reduce the interest rate, but a weak ruble and high inflation requires, - to improve it . According to Professor Ian Vynnyky economy , Russia was about the same problems as the USSR in the 80s . When energy prices fell , the country collapsed into bankruptcy . Forecast Winick very gloomy : "When the Olympic flame goes out , the joyful song can become a" swan song . "
Foreign investors known as " voting with their feet ", and given that an outflow of foreign capital in the first months in 2014 amounted LP billion. U.S., second only to the 2009 figures , it can be concluded that the Russian economy if not yet in crisis , at least in critical condition.
The European Commission has published 25 February economic forecast on the basis of which it can be concluded that Russia would " feel worse than expected. Growth forecast for Russia's GDP over the next couple of years is reduced , and significantly : for the current year - to 2.3% from 3% for 2015 - to 2.7 % from 3.4% . Grounds for pessimism served up last year : according to the EC, the Russian economy grew by 1.3% instead of the expected 1.9%.
Slowdown of the Russian economy EC experts associated with the fall of consumption growth to below 5 % ( a year earlier the rate was 8%). Inflation , according to analysts , will decline less vigorous pace as the Russian authorities hope : in 2014 - up 5.9% in 2015 - up to 5 %. ( Ministry of Economic Development official forecast 4.5 - 5.5% "for the current year and 4 - 5 % for 2015 - 2016 Godi . ) However, estimates of the growth rates in the past year also varied considerably according to the EC, it reached 6.8% while the official rate Rosstat - 6.5%. But in any case , goods and services will go up , and it is not itself the best way affect consumer demand . In addition, the unemployment rate in Russia , according to the European Commission , from last year's 5.5% increase to 5.9 % and 6.2 % in 2014 - 2015 .
International rating agency Fitch argues that delaying the economic and political crisis in Ukraine primarily negative impact on Russian banks , due to their significant presence there. Most susceptible to these risks , according to Fitch, the state corporation " Bank for Development and Foreign Economic Affairs " (Vnesheconombank , TSZ) , OAO " Gazprombank " and JSC "Bank VTB " . Fitch estimates the associated risks (relative to capital) VZBa 74% , Gazprombank about 40 % and VTB not less than 14%).
Deteriorating economic conditions and falling consumer demand in Russia in the future and have a negative impact on the economies of the countries of the Customs Union , given that Russia has been and remains the main market for the product . Even more it will affect and possible economic sanctions , which threaten to impose on Russia the EU and the U.S. in response to the aggression of the Kremlin 's policy towards Ukraine .
Kazakh experts have expressed the need to postpone what or signing treaties and agreements on the Eurasian Union , the Customs Union , especially in Russia at the time of settlement of the conflict in the Crimea. Since it is fraught with serious consequences not only for Russia but also for Kazakhstan and other CIS countries . U.S. and EU authorities may, in particular , to prohibit their banks to lend to Russian companies . Russian steelmakers , gas companies , oil companies , who took out loans in euros and dollars , have already felt the drop in the value of the ruble by 20 percent . Who is at risk of almost all major Russian companies . Hypothetically , in the future may follow , a ban on exports of sensitive technology , which also affect a number of Russian companies. If Russia does not find a peaceful solution to this conflict, economic sanctions , in case of actual invasion of the Crimea will be heavy.
Now the Kremlin plans to hold a mass infusion of funds into the economy of Crimea , forgetting that the vast territory of the Federation are in an extremely depressed . Instead of having to draw attention to the problems of the population , which is now no exaggeration fed exclusively propaganda and promises to improve the lives of tens of billions of dollars now go to a foreign country . And we already know that the rejection of Moscow's plan for burying the Crimea : the whole world declares its readiness to impose sanctions against Russia - military, economic , and humanitarian .