The Lastest Macroeconomic News
03.11.2016 12:36 Russia in Decline
On October 20, The Jamestown Foundation held a workshop in Washington D.C. titled “Russia in Decline,” with the participation of a veritable Who`s Who of senior American experts on Russia. It was the concluding exercise of an extensive research project on Russia designed to provide policy guidance to the next president of the United States. Prior to the workshop, the leader of the project, S. Enders Wimbush, had solicited written contributions by a dozen of the best-known Russian political commentators and economists. The bottom line of both the workshop and Russian contributions was a remarkable consensus: Russia has entered a period of prolonged decline that will take many years to reverse even if it could be stopped soon, which is unlikely. The decline is man-made and predates Russian aggression in Ukraine and Western sanctions; it is the aggregation and interaction of a variety of negative systemic trends in Russian society already in existence. Reversing these trends, the experts concluded, will be extremely difficult if not impossible. Russia`s decline is likely permanent.
02.11.2016 17:19 What is the real state of affairs in the Russian economy?
Economist Yakov Mirkin gave another pessimistic forecast about the state of affairs in the Russian economy. According to him, Russia will face a decline in living standards, an economic setback and fluctuations in GDP growth on minimal levels. At the same time, international experts say that the Russian economy has been stabilizing, whereas Standard and Poor`s and Fitch have upgraded the ratings of major Russian companies. What is happening in reality? Pravda.Ru requested an expert opinion from Vice-Rector of the Financial University under the Government of the Russian Federation, Doctor of Economic Sciences, Professor, Honored Economist of the Russian Federation, Sergei Silvestrov. "Who is closer to the truth about the current state of affairs in the Russian economy? Can Russia boast of any success in overcoming the crisis?" "There are no large-scale changes at this point. It is only agriculture that shows some improvement, and this is largely a consequence of the allocation of state credits and tax incentives from the government. All other sectors of the Russian economy are, unfortunately, stagnating.
02.11.2016 13:50 Russia could miss some economic 2017 targets
Even with crude oil prices holding relatively stable, a former finance minister in Russia said it will be tough for the oil-based economy to hit 2017 targets. Russian Prime Minister Dmitry Medvedev said the federal budget was based on oil priced at around $40 per barrel, about $10 per barrel less than the current level. Central Bank Gov. Elvira Nabiullina said the rate of inflation is expected to be close to its low-end outlook of around 5.5 percent this year and the International Monetary Fund said there are prospects for "modest" recovery starting in 2017. Alexei Kudrin, the director of Russia`s Center for Strategic Research and a former finance minister, was quoted by Russian news agency Tass as saying, meanwhile, the budget deficit for this year could be as high as 3.9 percent of gross domestic product. "The plan for next year is 3.1 percent, which will be difficult to fulfill," he said.
31.10.2016 15:45 China`s Only 15% Of The Global Economy But Contributes 25 - 30% Of Global Growth
It`s entirely possible to become a little over-enthusiastic about the size of China`s economy. Yes, assuming that we don`t count the European Union as one economy, it`s the second largest economy on the planet. If we do agglomerate Europe then it`s the third. But it`s also true that it`s around 15% or so of the global economy. That`s massively up from where it was in recent decades, entirely true, but it`s not that it is anything like the majority of what is going on out there. We should be careful with these numbers of course, they`re not going to be accurate. We simply don`t measure the global economy in any particularly accurate manner. We could well be out by a few percentage points either way here. So keep that in mind. However, there`s another way of looking at that Chinese economy and that`s to think of its contribution to global growth. There it`s more like 25-30% of total growth as the Chinese themselves are saying: On the other hand, as the second largest economy, China`s economic transition and growth is increasingly influencing the world economy. “It is estimated that the contribution of China`s economic growth to the world economy is expected to maintain at 25 to 30 percent, he said.
29.10.2016 12:46 The World Economy Without China
Is the Chinese economy about to implode? With its debt overhangs and property bubbles, its zombie state-owned enterprises and struggling banks, China is increasingly portrayed as the next disaster in a crisis-prone world. I remain convinced that such fears are overblown, and that China has the strategy, wherewithal, and commitment to achieve a dramatic structural transformation into a services-based consumer society while successfully dodging daunting cyclical headwinds. But I certainly recognize that this is now a minority opinion. For example, US Treasury Secretary Jacob J. Lew continues to express the rather puzzling view that the United States “can`t be the only engine in the world economy.” Actually, it`s not: the Chinese economy is on track to contribute well over four times as much to global growth as the US this year. But maybe Lew is already assuming the worst for China in his assessment of the world economy.
27.10.2016 11:23 Sanctions Damage Russian Economy but Don`t Work as Political Tool
The sanctions imposed on the Russian economy cost the country up to 1 percent of the GDP growth every year but they do not work as an instrument of political influence, former Russian Finance Minister Alexei Kudrin said Wednesday. "Russia bears significant expenses because of the sanctions. I always mention the figure from 0.8 percent to 1 percent of the GDP growth that is not achieved… annually. That`s why the words that the sanctions are insignificant are not true. They have a significant impact on our economy, growth and living standards," Kudrin told reporters. The former minister added at the same time the sanctions were not effective as a political tool. "It is another matter that [the sanctions] as the political tool do not function, do not work. I agree with this. It has not influenced our policy at all," Kudrin added. Following the beginning of the Ukrainian crisis, the European Union and the United States accused Moscow of meddling in Kiev`s internal affairs and imposed several rounds of sanctions against Russia, as well as decreasing the general level of cooperation with Russia. The Russian authorities have refuted the allegations, warning that the Western measures are counterproductive.
25.10.2016 14:03 The 5 Biggest Challenges the Global Economy Faces in 2017
International forecasters fear that 2017 will not be a big improvement on 2016 for a sluggish global economy. With plenty of risks ahead including geopolitical and economic instability, here are the five main challenges facing the world economy in the upcoming Year of the Rooster. The International Monetary Fund has warned that rising populism and protectionism have correlated with stagnating economic growth. In its latest “World Economic Outlook,” the IMF`s chief economist Maurice Obstfeld warned that “turning back the clock on trade can only deepen and prolong the world economy`s current doldrums.”
23.10.2016 19:27 Russia`s output decline may be prelude to GDP contraction
Russia`s industrial output was down 0.8% y/y in September and was 0.3% weaker than August on a seasonally-adjusted basis. The manufacturing sector, which accounts for the majority of industrial production in Russia, contracted in September by 1.6% y/y. This more than offset some growth in mining (+2.1% y/y) and utilities (+0.8% y/y). Russia`s manufacturing sector output is volatile and a monthly drop is often followed by a spike (often a result of large orders or projects completed in a single month). However, a closer look at September manufacturing statistics show that the weakness was not confined just to a sector or two, but was quite pronounced throughout industry.
21.10.2016 18:17 Duterte says US lost control of world economy
Shackled with trillions of dollars in debt to China, the US no longer controls the world economy, President Rodrigo Duterte said. Duterte spoke to Chinese businessmen in Beijing Thursday, in the middle of a four-day state visit that is meant to repair ties between Manila and Beijing that have been strained by disputes in the South China Sea. "America does not control the economy now. His place that he is the most powerful industrial nation in the world. That`s a lot of bullshit," Duterte said, to applause from the audience. "How can you be the most powerful industrial country when you owe China and you are not paying it for almost three trillion dollars? Kalaki-laki ng utang mo, may utang ka [You are saddled with huge debt]" he added. China is the biggest holder of US government debt, with $1.9 trillion in bonds, notes and bills as of August, according to Bloomberg data.
19.10.2016 13:20 Fitch: Russian recovery likely to be drawn out and weak
The Russian economy will struggle to return to pre-crisis growth levels in the next few years because consumer demand will stay weak as people save more and spend less, Fitch Ratings said on Tuesday. Consumer demand is the largest driver of Russian growth, while proceeds from energy exports, another important contributor, are seen stuck near multi-year lows as a global glut restrains oil prices. Presenting Fitch`s forecasts for 2016-18, Associate Director for Consumer and Healthcare Tatiana Bobrovskaya said Russian consumers would stay focused on keeping costs down. Some recovery in consumer demand was possible in the low and middle price segments of the market, she said, but stronger demand in higher price segments might only be possible from 2018. "The year of 2017 will still be very difficult for retailers and producers," Bobrovskaya said, adding that consumer confidence in the third quarter of 2016 remained at "crisis levels".
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