The Lastest Macroeconomic News
12.04.2020 17:59 BOFIT: Russia`s economy to contract by 1% in 2020
Russia`s economy will contract by 1% in 2020, according to the latest forecast by the widely respected Bank of Finland Institute for Economies in Transition (BOFIT). Russia started this year with an official forecast for 1.9% growth. But the double whammy of an oil price shock following OPEC+ production cut deal collapsed on March 6 closely followed by an escalating coronavirus (COVID-19) pandemic that has brought the global economy to a standstill will hurt the Russian economy. As bne IntelliNews reported after crunching the numbers Russia`s macroeconomic fundamentals are strong, but Russia Inc will not escape unscathed. Finance Minister Anton Siluanov said last week that the virus-related slow down will blow a RUB2 trillion hole in the budget and growth will slow to at least 0.5% this year. However, with over RUB10,000 trillion in the National Welfare Fund (NWF) the ministry can fund this sort of budget deficit for the next five years. Siluanov claims the government can cover the budget deficits that result from $30 oil prices for as long as a decade. Former Finance Minister and Audit Chamber head Alexei Kudrin, who is a widely respected authority on Russia`s economy, warned that if oil prices fall and stay low then the slowdown will be deeper and longer. BOFIT calculates that the economy will contract by 1% this year,” due to notably lower commodity prices and a weakened outlook for the global economy. We expect Russian GDP to return to moderate growth next year.”
18.03.2020 14:08 Surging U.S. Dollar Is Next Big Headache for World Economy
King Dollar is creating a new headache for virus-battered economies globally, with emerging markets especially vulnerable as they try to cope with collapsing currencies and plunging demand. Investors are fleeing emerging markets in record numbers and piling into the safe-haven greenback, with two emergency interest-rate cuts this month by the Federal Reserve doing nothing to diminish the dollar`s appeal. With the dollar more integrated into the world economy than ever before, its gains are an added stress for businesses and governments as they brace for soaring costs on their dollar debt. The dilemma for emerging market central banks is that as they slash interest rates to support growth, they risk destabilizing their currencies as well if they cut too much. “The surge in the dollar is another blow to emerging markets,” said Mitul Kotecha, senior emerging markets strategist at TD Securities in Singapore. “The demand for the dollar has outweighed any hit to the U.S. currency from sharply lower Fed rates. EM assets will continue to struggle as investors steer clear of relatively risky assets and maintain a bias for safe havens.”
17.03.2020 20:06 Will coronavirus trigger a global recession? The worst is still to come, experts warn
A global recession may be inevitable now as the world battles the coronavirus pandemic, economists say. “In our view, the worst for the economy is still to come over the next several months,” said Joachim Fels, global economic advisor at PIMCO, CNN Business reported. A lockdown in Italy, temporary business closures across the U.S., jittery stock markets and production halts in China, along with a drop in oil prices, all point to an economic slowdown, according to the network. S&P Global`s economists also have predicted a worldwide recession in 2020, MarketWatch reported. They forecast global GDP growth at less than 1.5% for the year. The COVID-19 virus, first reported in China, has swept across Asia and now has sparked new outbreaks in Europe and the United States. More than 185,000 cases of coronavirus have been confirmed worldwide with more than 7,300 deaths as of March 17, according to Johns Hopkins University. The United States has more than 4,600 confirmed cases with at least 88 deaths. The World Health Organization has declared the COVID-19 virus a global pandemic. In the United States, President Donald Trump has declared a national emergency. Factory shutdowns in China, one of the world`s top production centers, have caused ripples throughout the global supply chain.
03.03.2020 21:35 Russia`s economic growth at 1.3% in 2019, slightly above expectations
The Russian economy grew 1.3% in 2019, preliminary data from the statistics service showed on Monday, slightly exceeding expectations. Analysts polled by Reuters in late 2019 expected Russia`s gross domestic product to expand 1.2%. The central bank predicted that the economy would grow by no more than 1.3%. Rosstat has revised data in the past, usually to give the statistics a more positive hue. For example, in late 2019 Rosstat revised GDP growth figures, altering the trajectory of Russia`s 2018 economic growth to 2.5% from 2.3%. Rosstat has said it has five readings of GDP and revisions make numbers more accurate. In the next few years, GDP growth is expected to pick up thanks to state investment in large infrastructure projects, reaching 2% to 3% by 2022, according to the central bank`s forecasts. This year, the Russian economy was seen growing by 1.8%, below the 2.5% global growth projected by the World Bank, analysts polled in late January predicted.
31.01.2020 17:18 Economic growth looks even weaker this quarter, with virus now a wild card
Coming off the slowest year of growth in three, the economy in the first quarter of 2020 is expected to slow down even more due to the impact of Boeing and now the potential wild card of the coronavirus. Fourth-quarter GDP growth was 2.1%, in line with economists` expectations. GDP grew 2.3% for the year, the slowest pace since 2016. The GDP report, released Thursday morning, revealed continued weakness in business spending and more sluggish consumer spending, with consumption up just 1.8%, down from 3.2% in the third quarter. Residential spending was strong, supporting GDP by 0.2%. Millar expects first-quarter growth of just 1.5%, but that includes the anticipated half a percentage point hit from Boeing`s production cuts. That should reverse by the third quarter, when he expects growth of 2.5%, following 2% in the second quarter, he added.
23.01.2020 20:31 Russian central bank sees inflation slowing down in early 2020
Russian inflation is expected to keep slowing down in the first months of 2020, the country`s central bank said in a monthly analytical review Wednesday. "The Bank of Russia predicts a further decline in annual inflation in early 2020, including due to the exhaustion of the effect of the value added tax (VAT) increase in 2019," it said. "Given the current monetary policy, annual inflation will be in the range of 3.5-4.0 percent in the full year of 2020 and will remain close to 4 percent further on," it added. The inflation rate in Russia slowed down to 3 percent in 2019, according to the country`s official statistics service Rosstat. The central bank said that is because of disinflationary factors, such as an increased food supply, ruble appreciation and weak demand. In 2018, inflation in Russia jumped to 4.3 percent from a record low of 2.5 percent in 2017, after the VAT increased to 20 percent from 18 percent, which resulted in rising prices of certain goods, as well as the weakening of the ruble.
30.12.2019 20:58 QNB expects modest acceleration of global GDP to 3.4% in 2020
Driven by “easier” monetary policy around the world, in particular the Fed`s dovish pivot to cutting interest rates, a “modest acceleration” of global GDP growth to around 3.4% is expected in 2020, QNB has said in its weekly economic commentary. That is despite the ongoing US-China trade war, global manufacturing recession and other risks to the outlook, QNB said. However, QNB is concerned that the world has become too dependent on monetary policy, which is becoming less effective. There is also a growing risk that low global interest rates are inflating debt and asset price bubbles. Therefore, it is important that fiscal policy can respond to any substantial negative shocks that hit the global economy. In this week`s article, QNB first assessed the current fiscal stance (i.e., whether fiscal policy is a headwind or tailwind for the economy). It has then considered three key constraints on fiscal policy. The need to ensure government debt sustainability and the difficulties arising from both political polarization and vested interests.
11.12.2019 15:02 The unemployment rate in Ukraine is reduced
The unemployment rate in Ukraine in recent months tends to decrease. So, in the second quarter of 2019, the indicator reached 7.8% compared to 9.2% a quarter earlier. In absolute terms, the decrease amounted to 235 thousand people, therefore, the total number of unemployed in the country decreased to 1.4 million people. Such data were published by the State Statistics Service. The report also notes that in 2018 the number of unemployed was 1.57 million people, and a year earlier - 1.85 million people. The country is gradually emerging from the crisis and more and more jobs are being created in the economy. However, often people do not go to the exchange when looking for a new job, but make attempts to find it on their own.
10.12.2019 14:52 Bitcoin: trading dominance on Binance remains above 40%
According to a new analytical review of the Binance cryptocurrency exchange, released in early December, the main cryptocurrency Bitcoin has been holding a share in the trade for more than 40% for five consecutive months. Such information was published by the research division of the financial giant Binance Research. The dominance value was calculated by analysts as the ratio of the trading volume in which bitcoin is involved to the total volume of spot transactions conducted on the platform during the month. The review notes that the share of the main cryptocurrency grew by 1.45% in November compared with the previous month and amounted to about 47%. In August, the figure was 45.5%, and in September it also exceeded 40%.
08.12.2019 13:10 The main threats to the Russian economy
The main global macroeconomic factor is the aggravation of trade disputes in the world, the creation of additional trade barriers and, as a result, the slowdown in global economic growth. For the Russian Federation, this is, first and foremost, a reduction in the price of commodities such as oil, natural gas, and metals. Geopolitics, according to analysts, now has a very large negative impact on the economic environment, reducing production activity and, as a result, demand on world markets. IMF forecasts in this regard only confirm the trend. The world economic growth in 2019 will be the lowest since the financial crisis of 2008-2009 and will reach only 3%. In addition to geopolitical, experts identify cyclical factors as additional causes of economic slowdown.