The Lastest Macroeconomic News

06.10.2016 13:35 Oil-rich Russia taps into reserve funds

While forecasting an economic recovery soon, the Russian government draws from its reserve funds to cover a budget gap. For the third time this year, the Russian Finance Ministry said it pulled money out of its reserve funds in an effort to cover a budget deficit. According to a report from Russian news agency Tass, the government transferred $6 billion from the reserve fund to cover a gap in the budget, thus depleting the fund by 18 percent from August. In April and May, the government pulled $6 billion from the fund each month to cover the deficit. A July report from the International Monetary Fund said the Russian economy would remain in recession through the remainder of 2016 because of lower oil prices and sanctions imposed by Western powers in response to the Kremlin`s stance on crises in Ukraine. Economists at the IMF said Russia was moving through a fiscal adjustment period that started in 2015, though there are prospects for "modest" recovery starting in 2017.

04.10.2016 18:30 IMF warns of protectionist threat to global growth

The IMF on Tuesday left its global economic forecasts unchanged into 2017 but called governments to action against the threats of low growth and protectionism. Global output is expected to grow this year at a rate of 3.1 per cent before rising to 3.4 percent next year, estimates that are unchanged from July, according to the International Monetary Fund. But the Fund downgraded forecasts both for growth in global trade volume and for advanced economies` output, saying that prospects for richer countries had darkened this year. "It is vitally important to defend the prospects for increasing trade integration," said IMF chief economist Maurice Obstfeld. "Turning back the clock on trade can only deepen and prolong the world economy`s current doldrums." The IMF notably cut its growth forecast for the United States, the world`s largest economy, but upgraded those for Japan and the Eurozone.

03.10.2016 11:50 Russia is preparing for $40 oil for a long time

Fourty Dollar Oil ? The Russian economy is slowly recovering from its oil and sanctions-induced coma, but reforms to encourage long-term economic growth are still not a priority; that`s according to a new research report from Morgan Stanley. Some Morgan Stanley analysts and economists recently visited Russia to try and get some idea of where the country is heading financially over the next few years. Analysts visited the CBR, Ministry of Finance and Ministry of Economy, as well as the IMF and a broad range of market experts. Discussions were centred on the growth outlook, the upcoming 2017-19 budget plan, the CBR`s vision of monetary policy and the political outlook.

01.10.2016 06:14 Russian economy likely to contract this year, expand next

The affirmed preliminary data of Russias second quarter GDP growth showed that the economy contracted 0.6 percent year-on-year, as compared with a 1.2 percent contraction in the first quarter. According to the details published, the agricultural sector grew 2 percent annually, while manufacturing, mining and quarrying rose 0.3 percent year-on-year. On the other hand construction contracted 9.5 percent annually, whereas wholesale and retail declined 1.2 percent. The preliminary seasonally adjusted data for the month of August indicated that the Russian economy grew 0.3 percent sequentially, the first growth since September 2015. The economy is expected to shrink 0.6 percent year-on-year for the whole of 2016, given the Brent year average of USD 48.6/bl, noted Danske Bank in a research report. For the next year, Russias GDP is expected to expand 1.2 percent, added Danske Bank.

29.09.2016 13:38 EU sanctions hurting Russian firms, US says

EU and US economic sanctions are draining money from some Russian companies and from its state aid fund, according to US research. The sanctions have, over the past two years, wiped out one third of the operating profit, half of the assets, and one third of the staff in some targeted Russian firms, a new study by the US state department said. Russian oil firms, such as Rosneft have no access to short-term credit or high-end technology. Russia`s foreign reserve fund, which is being used to prop up affected companies, is due to run dry in early 2017 at the current rate of spending, it also found. It said that low oil prices and shoddy management were bigger factors in Russia`s economic decline. But it said sanctions also caused uncertainty, prompting some investors to derisk by abandoning Russia, even if investments had no direct link to Western blacklists.

27.09.2016 13:30 WTO lowers global trade growth to 1.7% this year

The World Trade Organization has for the third time lowered its global trade growth forecast for this year to 1.7 per cent, stating that this slowdown is "serious" and should serve as a "wake-up call" for nations. "World trade will grow more slowly than expected in 2016, expanding by just 1.7 per cent, well below the April forecast of 2.8 per cent," according to the latest WTO estimates released today. In September 2015, the WTO estimated that global trade would rise by 3.9 per cent in 2016. It lowered that projection to 2.8 per cent and now to 1.7 per cent. Slowing world trade will have implications for India, which has been witnessing decline in exports. Its outbound shipments are in the negative zone since December 2014. The WTO said: "The contraction was driven (not only) by slowing GDP and trade growth in developing economies such as China and Brazil but also in North America, which had the strongest import growth of any region in 2014-15, but has decelerated since then."

25.09.2016 21:57 10 features that define Russia`s economic crisis

Russian Prime Minister Dmitry Medvedev has published an article about the causes and results of the economic crisis in Russia in which he outlines the situation and the options facing Moscow. RBTH presents the 10 key points of Medvedev`s article. Because of the oil price slump, Western sanctions over Ukraine and structural problems, the Russian economy has found itself in a serious crisis. In an article (in Russian) in the official government newspaper Rossiyskaya Gazeta, Russian Prime Minister Dmitry Medvedev looks at the main cause of the crisis and its key repercussions, as well as the options the country faces in order to work its way out of crisis. In his opinion, Russia is going through a fundamental overhaul of its economic system.

23.09.2016 10:59 Russian economy crumbles, according to official data

Russian consumers continue to struggle in the second year of a recession, with official data showing that the amount of real disposable income people had in August fell at the fastest pace in seven years. Official government statistics show that Russia`s economy shrank by 4.1 % during the third quarter of 2015 as a recession caused by low oil prices and Western sanctions over Russia`s role in Ukraine`s civil war continued to take its toll. Real disposable income has been falling since 2014 when Russia was hit by Western sanctions over its role in the Ukraine crisis, but the 9.3 % decline, in annual terms, was the steepest since August 2009, the aftermath of the global financial crisis. Real income, adjusted for inflation, also declined, by 1 %, after showing some positive signs earlier this summer, according to the data from the Federal Statistics Service, or Rosstat. With less money to spend, consumers also stayed away from shopping, with retail sales, a barometer of customer demand in Russia, down 5.1 % in August and following a 5.2 % decline in July.

21.09.2016 13:21 OECD: Low-growth trap set to continue; central banks creating market distortions

The world economy remains in a "low-growth trap" and weaker conditions in advanced economies will persist into 2017, the Organization for Economic Co-Operation and Development (OECD) warned on Wednesday. In its interim economic outlook, the OECD forecast that global gross domestic product (GDP) growth is projected to remain flat at around 3 percent in 2016 "with only a modest improvement projected in 2017." It predicts global growth to expand 2.9 percent this year and 3.2 percent in 2017, lifted by China and India. The forecast was largely unchanged since June 2016, the OECD noted, with weaker conditions in advanced economies, including the effects of the U.K.`s vote to leave the European Union (EU), "offset by a gradual improvement in major emerging market commodity producers." "The world economy remains in a low-growth trap with persistent growth disappointments weighing on growth expectations and feeding back into weak trade, investment, productivity and wages," it said.

19.09.2016 12:44 Russia`s economy heading to recovery

Russia`s economy is gradually emerging from contraction and heading to recovery, a global ratings firm says. Standard and Poor`s said in its latest report on the health of the Russian economy that the recession it has faced is coming to an end. It revised its assessment of Russia`s credit risk from negative to stable. The outlook revision reflects our view that external risks have abated to a significant extent, the rating agency said this weekend. We expect the Russian economy and policy making will continue to adjust to the lower oil price environment and that the country will maintain its strong net external asset position and moderate net general government debt burden in 2016-2019, it added in its report. Russia`s GDP contracted 1.2 per cent in Q1 2016 but that slowed to 0.6 per cent in Q2, according to data from the Rosstat federal statistics service. This is a marked improvement to its 3.7 per cent contraction in 2015; it contracted 3.8 per cent in Q4 in 2015.

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