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Posts : 18379
Join date : 2015-05-20
Location : United States

Russia! You have big economic problems and more to come

on Fri Sep 11, 2015 7:08 pm
The controller is waiting for a deepening recession in the current year and to continue falling in the next

The recession in the Russian economy in the current year increased and amounted to 3.9-4.4%. The following year, the decline could reach 1%. This is the forecast of the Bank of Russia, presented on Friday. At the same time the regulator has no plans to stimulate the economy by lowering its key interest rate, he was more worried about inflation. At the same time the Central Bank will not stabilize the exchange rate, even though it leads to inflation and increases the level of uncertainty in the economy.

The Board of Directors of Bank of Russia September 11, 2015 decided to maintain its key rate at 11% per annum. The main reason for this decision - "an increase in inflation risks, while maintaining a significant risk of cooling the economy." Reduce the rate regulator promises only "to the extent of reducing inflation."

The materials of the Central Bank (the press release about the project and the rate of "Main directions of monetary policy for the years 2016-2018") notes that the annual inflation rate increased from 15.6% in July to 15.8% in August. According to the Bank of Russia, as of September 7, the growth rate of consumer prices remained at the same level (according to the Federal State Statistics Service, inflation was 0.2%).

To higher prices led the July increase in utility rates and the depreciation of the ruble.

"What happened in July - August depreciation of the ruble will continue to have an impact on the dynamics of inflation in the coming months", - said the regulator. According to the head of the Central Bank, Elvira Nabiullina, the contribution of the August devaluation in price growth was 0.2%. According to her, the problem in the course of high volatility of oil prices, for which he should be.

In addition to the negative impact on inflation, significant fluctuations of the ruble (Russian currency moves in a "corridor" of 50-70 rubles. Per dollar) increase the level of uncertainty in the economy, reducing the already located in the negative zone investment activity. Moreover, it is disadvantageous to exporters or because their ruble revenues constantly "dancing" or importers who have to form the price of goods on the basis of expectations of a new devaluation.

However, Elvira Nabiullina said that the Bank of Russia does not plan to establish for themselves some internal courses, which will be the intersection of the signal for buying or selling currency. The course we have free, she said.

Earlier, presidential aide Andrei Belousov suggested that the Central Bank would enter the market with the purchase if the dollar goes below 60 rubles.

"Naturally, it is necessary to buy the currency, the ruble will pereukreplyatsya, amid a steady trend significant strengthening of the ruble. I think that if the dollar falls below 60 is not essential, then it can start to do, "- she quoted him as saying the agency" Prime ".

Failure by the Bank of Russia exchange rate stabilization (or rather, by preventing its excessive strengthening, as it happened in the spring of this year) could trigger a new period of weakening and strengthening of the Russian currency, if the oil price will rise or fall. As a result, it is likely the new inflationary surge.

Their Central Bank (together with the Ministry of Finance) compensates for tight monetary policy, budget cuts and limitation of actual consumer demand.

"Moderately tight monetary policy and a weakening of consumer demand with a substantial reduction in real incomes limit the growth of consumer prices", - the materials of the regulator.

The head of the Central Bank supported the Ministry of Finance and opposed the indexation of salaries to state employees, pensions and social payments to inflation. In her opinion, it "could create risks of inflationary spiral" and "in fact, real wages will not benefit from this because it can be quite large inflation".

It also threatened that if implemented indexation to inflation, monetary policy may be more stringent than "at a moderate indexation".

Because of the July-August bursts Central Bank counted the downside inflation forecast for the current year. Now he is waiting for a company of prices up to 13%. But in 2016, he still assumes inflation at 5.5-6.5% and in 2017 - 4%.

However, while he is fighting inflation (it is worth recalling that 4% of Russia was never in a quarter century, and the best result - 6.1% was recorded in 2011), allowing the ruble to float freely, and welcomes the reduction in consumer demand, the economy It slides deeper into recession.

This year, with the price of Russian oil at $ 52 per barrel regulator predicts recession in the 3.9-4.4%, which is higher than forecasts, Ministry of Economic Development (the latter figure, voiced by the head of department Alexey Ulyukaev - 3.3%).

Under the baseline scenario of the Central Bank, in the next year at $ 50 per barrel will drop to 0.5-1% (investment and consumer demand will also remain in the red). The growth will not begin before the second half of next year, said Nabiullina. When you save the price of oil at $ 50 in 2017. The regulator expects economic growth of around 1%, in 2018 - 2-3%.............
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