The Lastest Macroeconomic News

20.10.2015 19:37 Russia`s recession-hit economy slumps 4.3% in third quarter of 2015

Russia`s economy shrank 4.3% in the third quarter this year, the government said yesterday, as a recession caused by low oil prices and Western sanctions over Ukraine continued to take its toll. Deputy economy minister Alexei Vedev told Russian news agencies that preliminary estimates put the year-on-year drop in gross domestic product for the third quarter at 4.3%, after contracting by 3.8% in September compared with 4.6% in August. Officials in Russia are struggling to breathe life into the economy as the rouble has dropped precipitously in value and inflation and poverty have risen sharply. Overall, the economy shrank 3.8% for the first nine months of the year, Vedev said. In a sign of how tough the situation has become, official statistics released yesterday showed that consumer spending in the country is falling at its steepest rate in 15 years. Year-on-year retail sales fell by 10.4% in September, the sharpest drop since 2000 according to RIA Novosti news agency, as Russians have seen their spending power stripped away by the crisis. Statistics showed that real household incomes dropped by 9.7% in September on the back of a 9.8% plunge in August.

18.10.2015 11:29 No Good News for Russia`s Economy

Even such exciting foreign policy news as Russia`s intervention in the Syrian civil war does nothing to help the condition of this country`s economy. To the contrary, even prior to 2014, Russia spent an inordinate amount on military expenses and for the country`s "security" in the broad sense of the word. And now that military action "justifies" otherwise pointless and nonproductive expenses, it has become even more difficult to reduce outlays for weapons production. It was clear 30 years ago that the Soviet economy could not cope with the burden of excessive military spending. However, leaders refused to cut those expenses until an economic disaster hit and those outlays along with all others were drastically reduced. And it is just as wrong to blame those who were in power at the time as it would be to blame an emergency room physician for the death of a patient who had led an unhealthy lifestyle for decades. Neither does the economy receive a boost from cultural news. News that prominent Russian-language writer Svetlana Alexievich won the Nobel Prize for literature cheered those who cherish Russian literature, but it only deepened the paranoia of those who believe the award is given for political reasons and that foreign forces have spawned the recent rash of civil wars and revolutions.

16.10.2015 11:33 Why the US market for buying and selling a business is improving

Why the market for buying and selling a business is improving While the post-recession business-for-sale market has generally favored buyers, there are several signs that we`re experiencing a shift towards a more balanced market. Early 2015 data shows an improvement in the overall financial health of small businesses and an uptick in the pace of small business transactions. In fact, data from BizBuySell.com`s most recent Q1 2015 Insight Report showed a 6 percent year-over-year increase in business transactions, which marks two years of consistent financial improvement in the business-for-sale market. Several factors contribute to market conditions that benefit buyers and sellers alike: 1. Improving financial health. 2. Growing supply and demand. 3. A more balanced market.

15.10.2015 17:51 Russian real estate investment market lags stabilization in macro indicators in H1 2015

In H1 2015 Russian real estate investment volumes decreased by 33% compared to the same period of the previous year, with total investment volumes at USD1.1bn, according to analysts` calculations. This number includes Q2 investment volume of USD578m, down 33% YoY. Following the market dislocation of 2014 and Q1 2015, during Q2 2015 we have seen evidence building that the economy is starting to stabilize, which, in our view, will have a positive impact on the real estate market in the medium to long term, - Tom Mundy, Head of Research, JLL, Russia and CIS, commented. First, the market has upgraded its GDP growth forecasts for Russia. For example, The World Bank lifted its forecast for 2015 forecast to a contraction of 2.7%, up from the contraction of 3.8% it predicted in April. In addition, it has revised up its growth forecast for 2016 to 0.7% from the decline of 0.3%. However there is unlikely to be a positive impact on Russian real estate market in short-term since inflationary expectations remain elevated which is leading to continued pressure on domestic demand. Furthermore, though the central bank continues to decrease the policy rate it remains high which is keeping the cost of debt financing beyond the reach of most. As a result we maintain our forecast for Russian real estate investment volumes for this year at USD3.0bn.

13.10.2015 14:02 The Syrian Campaign Nails Myths About the Size of Russia`s Economy

Anyone who reads Western media coverage of Russia`s intervention in Syria will notice that a note of bafflement has crept in. How can Russia, the country "that doesn`t produce anything", whose economy is supposedly smaller than Britain`s or even Spain`s, and which is said to be economically on the ropes, able to conduct an air campaign in Syria? The short - and obvious - answer is that Russia`s economy is much bigger than Western political leaders and commentators imagine. Not only would Britain or Spain be unable to mount the sort of air campaign the Russians are waging in Syria. They cannot run a huge space programme, develop rockets like the Angara rockets, build a space centre like Vostochny, develop the Arctic, construct nuclear powered ice breakers, or feed themselves. Nor can they build a bridge as rapidly as the one the Russians are building to Crimea. Nor can they create alternatives to Google like Yandex, or alternatives to GPS like GLONASS, or alternatives to SWIFT like the Russians have done in just a few months.

10.10.2015 12:36 Good News On Russia Economy As Inflation Seen 50% Lower Next Year

Russian inflation is on the decline and by next year will be cut in half, if central banker Elvira Nabiullina gets lucky and the country`s weak economy cooperates.Barclays Capital thinks she will get lucky. And that means interest rates will start to fall next year. Once that happens, investors will start creeping into Russian stocks once more. Russia inflation declined slightly in September to a whopping 15.7% year over year, reversing direction after two months of increases. The Russian ruble and inflation pass-throughs have been the driving factors behind price increases there, says Daniel Hewitt, a Russian fixed income analyst for Barclays Capital in London. Between May to mid-September the ruble depreciated by nearly 40% against the dollar, tracking the woes of oil futures. But for the past month, the Russian currency has stabilized and even slightly appreciated. Ruble depreciation has led to inflation pass-through, making imports more expensive and pushing consumer costs higher for several months. With the ruble stabilizing, inflation is likely to stall for now.

09.10.2015 12:28 Russian universities rise in Times Higher Education rankings

The Moscow State University (MSU) jumped 35 places to 161st in the latest Times Higher Education (THE) World University Rankings. The total number of Russian universities listed increased from 2 to 13. The Lomonosov Moscow State University (MSU) was ranked 161 out of 800 in the Times Higher Education (THE) World University Rankings 2015-16, which were released on October 1st. 13 Russian academic institutions made the list this year, compared to just 2 in the 2014-15 rankings. MSU was once again ranked highest among the Russian universities. Last year, MSU was ranked 196 out of 400 (the list was expanded to 800 universities this year). The only other Russian university that was in the list last year was the Novosibirsk State University, ranked in the 301-350 position. This year, it fell in the rankings to 401-500. In the 2015-16 rankings, the Russian top 5 also included the Peter the Great St Petersburg Polytechnic University (201-250), the Tomsk Polytechnic University (251-300), the Kazan Federal University (301-350) and the National Research Nuclear University MePhi (301-350). "It`s great that Russia has 13 institutions in this list, with five of its universities sitting within the top 400," says Phil Baty, Editor, Times Higher Education World University Rankings.

07.10.2015 12:04 IMF Downgrades Global Economic Outlook Again

A slowdown in emerging markets is pushing the world economy into its weakest expansion since the financial crisis, the International Monetary Fund said Tuesday as it warned of a rising risk of a global recession and once again downgraded its growth outlook. China`s deceleration and the subsequent plummet in commodity prices revealed a developing world that overinvested, borrowed excessively and exhausted its ability to expand without major economic overhauls. The IMF cut its forecast for emerging markets to 4% this year, down 0.2 percentage point from its last update in July. That marks the fifth consecutive year of declining growth and a level nearly half the rate the IMF recorded six years ago. Modest growth in the U.S. and a meager recovery in the eurozone, meanwhile, haven`t been able to offset falling output in emerging markets. The IMF cut its projections for global growth to 3.1% this year from its previous forecast of 3.3%. Souring emerging-market prospects also are muting next year`s rebound: The IMF reduced its prediction for global growth in 2016 by the same amount to 3.6%.

04.10.2015 12:39 World Bank Downgrades Russia`s Economic Outlook

Russia`s economic outlook has worsened, the World Bank said on Wednesday, but the government is still betting that the oil-dependent economy will return to growth as soon as next year. Russia`s economy is now seen shrinking by 3.8% in 2015 and by a further 0.6% in 2016, according to the World Bank baseline scenario. In June, the World Bank had expected Russia`s economy to contract 2.7% this year before returning to growth and expanding 0.7% next year. Hit by a drop in the price of oil, along with Western sanctions, Russia`s economy has slid into recession for the first time since 2009. Russian authorities have so far done little to kick-start growth, hoping that the economy will grow anyway next year thanks to the base effect. The World Bank is less optimistic. Adverse external conditions pose a serious challenge to short-term growth prospects, the World Bank said in a report. Yet, high policy uncertainty prevails and the country`s outlook hinges not only on the evolution of external factors but also on its internal capacity to adapt to an increasingly difficult macro-fiscal context, it said.

01.10.2015 13:03 Five things to know about Russia`s failing economy

Russian President Vladimir Putin will try to reclaim his place in the superpowers club on Monday, addressing the UN General Assembly and meeting President Obama on the sidelines to discuss the crises in Syria and Ukraine. But while Putin takes center stage in New York, millions of Russians are sliding back into poverty. Here are five things to know about the Russian economy: 1. Economic misery. 2. Low oil prices. 3. Sanctions pain. 4. No new friends. 5. It`s not just oil and sanctions.

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