The Lastest Macroeconomic News
26.07.2016 19:28 Russian economy recovering slowly
Oil price stability offers some support for economic growth in Russia, though finance officials expects short-term pressures to endure. With oil holding relatively stable, there are few restrictions on meeting inflationary goals by the end of next year, a Russian finance minister said. "Inflation [in 2016] will be in the range of between 5.5 percent and 6 percent," Deputy Finance Minister Maxim Oreshkin said Monday. "This is how it is going now."Crude oil prices moved from above $100 per barrel in 2014 to below $30 per barrel in early 2016 because the global economy was too slow to take on the excess supply on the market. That price collapse hurt economies like Russia that depend in part on oil for revenue. With oil prices holding relatively stable at around $45 per barrel since May, the Central Bank of Russia said growth was "imminent." By the bank`s estimate, growth of 1.6 percent in gross domestic product is expected next year.
24.07.2016 21:41 Russian economy minister expects positive GDP dynamics in nearest future
Dynamics of Russian GDP will become positive in the nearest future, Minister of Economic Development Alexei Ulyukayev said this week at the meeting with Japan`s business community. "The situation in the real sector of the economy is improving. While production output declined 3.7% last year, its contraction lowered to 1.2% in the first quarter of 2016 and 0.8 in May. We expect GDP dynamics to become positive in the coming future," minister said. Dynamics of industrial production has already become positive, Ulyukayev said. "This pertains to producing branches and to the processing industry since May of this year. Nevertheless, many problems remain and we need to use the potential definitely and objectively existing in our trade and economic relations," minister added.
22.07.2016 12:18 Global warming set to cost the world economy £1.5 trillion by 2030
Global warming will cost the world economy more than £1.5 trillion a year in lost productivity by 2030 as it becomes too hot to work in many jobs, according to a major new report. In just 14 years` time in India, where some jobs are already shared by two people to allow regular breaks from the heat, the bill will be £340bn a year. China is predicted to experience similar losses, while other countries among the worst affected include Indonesia (£188bn), Malaysia (£188bn) and Thailand (£113bn). The figures were published in a research paper launched at a forum on how to reduce the risks of severe weather events held in Kuala Lumpur by the United Nations University and UN Development Programme.
20.07.2016 18:23 IMF forecasts growth in CIS countries` economies in 2017
The International Monetary Fund (IMF) in its World Economic Outlook has improved the forecast for economic growth in the CIS countries up to 0.6 percent and 1.5 percent, in 2016 and 2017, respectively. Earlier, in the April report, the IMF expected the CIS countries` GDP to reduce by an average of 1.1 percent in 2016 and increase by 1.3 percent in 2017. According to the July report, the GDP growth in the CIS countries, excluding Russia, is projected at 1 percent in 2016 and 2.5 percent in 2017. The IMF expects the Russian economy to contract by 1.2 percent in 2016 and increase by 1 percent in 2017.
18.07.2016 19:48 Oil Must Go to $40 and Stay There to Buy Russia Some Reforms
At an oil price of $40 or below, Russian President Vladimir Putin introduced a flat income tax, built a sovereign wealth fund and delivered speeches to the Bundestag in German. When it was over $100, he fought two wars with neighbors and splashed over $40 billion on a Winter Olympics. Brent crude at $40 is the key threshold for Russia, so low that institutional reforms become unavoidable but high enough to prevent a financial meltdown, according to a Bloomberg survey of economists. While more than a decade of booming revenue brought a $2.1 trillion energy windfall -- and with it prosperity the like of which Russia has never seen -- the economy hasn`t grown faster than 5 percent in eight years and has spent the last two in recession. The latest crisis, after oil prices crashed, set the stage for a long-overdue overhaul -- or almost did. "When oil was at $30, there was some commotion, and when it`s near $50, those people who are making decisions calm down," said Evgeny Gontmakher, chief economist at the Institute of Contemporary Development, whose board of trustees is headed by Prime Minister Dmitry Medvedev. "Starting real reforms is a risky business."
16.07.2016 13:51 Russia Economy Shows Signs Of Green Shoots
There are budding signs that the worst over in Russia with data showing the federal budget deficit narrowed, and oil revenue helped boost the economy. Indeed, the bottoming out of commodities demand should eventually fuel emerging market economic growth. Lazard Asset Management writes: "While we don`t expect a v-shaped recovery in emerging markets growth, we expect a turnaround driven not only by commodity exporting countries, such as Russia and Indonesia, but also by the base effects of last year`s dismal growth … We are watching the secondary effects of Brexit on global confidence and, more importantly, global growth."
14.07.2016 12:36 The amount of energy needed to run the world`s economy is decreasing on average
According to a report from the Energy Information Administration (EIA), the world is getting better, on average, at using energy to power its economic activity. The latest numbers measure “global energy intensity” or the number of British thermal units used for every unit of gross domestic product (GDP) created. A falling energy intensity measurement doesn`t mean the world is using less energy in total—but it does mean that global economic activities are getting more efficient on the whole. Specifically, the EIA says that global energy intensity has fallen by nearly one-third in the 25 years between 1990 and 2015. “Energy intensity has decreased in nearly all regions of the world,” the EIA says, in developed and developing countries alike.
12.07.2016 12:54 IMF improves outlook on Russia`s economy
The International Monetary Fund (IMF) has improved the outlook for the Russian economy. In April 2016, the IMF said that Russia`s economy could decline by an additional 1.8% this year; in May it improved the forecast on Russia`s GDP decline to -1.5% in 2016. According to new data, the Fund expects the Russian economy will decline by 1.2% in the current year, and will grow by 1% in 2017. Earlier, the director of the International Monetary Fund (IMF) Christine Lagarde said that in 2016, Russian economy will continue to "shrink". Current adjustments were made on the basis of a regular annual review of the Russian economy, conducted by specialists of the Fund in accordance with the statutory requirements of the organization. These results were discussed in the end of June at a meeting of the IMF Board of Directors. The Fund`s forecast for 2017 remains the same as in May.
09.07.2016 15:33 How Is Russia`s Economy? A Yeltsin-Style `Not Good`
Sometime in the mid-1990s, British Prime Minister John Major reportedly asked Russian President Boris Yeltsin to describe the Russian economy in one word. Yeltsin replied, “Good.” Seeking greater detail, Major asked Yeltsin if he could describe it in two words. Yeltsin replied, “Not good.” While this old joke is probably a myth, the current state of the Russian economy matches that “not good” of lore, and its prospects of getting better any time soon look dubious -- and this could lead to a serious geopolitical altercation.
07.07.2016 16:55 Negative effect of normalization with Russia on inflation
Inflation, which has followed a low course in recent months, started climbing again in June. Inflation is expected to climb further because the normalization process with Russia will have an increasing effect on inflation even as it makes a huge contribution to the economy. However, due to its huge contribution to the economy, the negative effect on inflation will be accepted as a bearable consequence. While the annual consumer price increase fell to 6.58 percent at the end of May, the annual inflation went up to 7.64 percent last month. The biggest contribution to this was food prices. With the effect of the halt of food exports to Russia, food prices have been low in recent months. There has been a correction, in a sense, and food prices increased at a rate of 1.2 percent in June, corresponding to the annual rate from 1.8 to 6.3 percent. The base effect has been huge in this high rate of increase. Both the opening of trade with Russia, the base effect and the developments in energy prices are expected to increase food inflation in the coming months and, correspondingly, the headline inflation rates.