The Lastest Macroeconomic News
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.
29.09.2015 12:34 China`s slowdown could actually be good news for the world economy
At the risk of appearing perverse, let`s start with a counter-intuitive proposition. The slowdown in China, far from weakening the global recovery, might actually help it become more durable. This is not, of course, what the markets think. They recovered a bit, but are still way off their summer peaks. The uncertainties there are echoed by the central banks. The principal reason why the Fed held off increasing US rates last week was the slowdown in China. Andy Haldane, chief economist at the Bank of England, suggested that an emerging-market crisis might become the third leg of the financial disruption that began in 2008-09. Mario Draghi, the president of European Central Bank, acknowledged these concerns, although he concluded: "More time is needed to determine in particular whether the loss of growth momentum in emerging markets is of a temporary or permanent nature."
27.09.2015 11:21 For Russia, Oil Collapse Has Soviet Echoes
For most countries, the economic slowdown in China and the accompanying slump in commodity prices represent something between nuisance and pothole. For Russia, they are a catastrophe. Russia`s currency and economy, already squeezed by Western sanctions, have been sent into virtual free fall by slumping oil prices. The International Monetary Fund predicted in July that Russia`s economy would shrink 3.4% this year, the most of any major emerging market. That now looks optimistic. Anders Aslund, a Russia expert at the Atlantic Council in Washington, thinks 6% is more likely. Coincidentally, that`s close to what the Russian central bank predicted would happen if oil fell to $40 a barrel, roughly its current level. As low commodity prices have impacted markets around the world, Russia may have been hurt the most. WSJ chief economics columnist Greg Ip explains why.
24.09.2015 12:34 Global economy`s outlook becomes bleaker
The outlook for the global economy became bleaker on Wednesday as signs of a deeper downturn in China emerged, despite massive policy stimulus, coupled with weak growth at best in Europe. China`s vast factory sector shrank at its fastest rate in 6-1/2-years in September, a private survey showed, sending investors worried about sagging global growth scurrying out of risky assets. Reacting to the data, Asian stocks posted their biggest single-day fall in a month on Wednesday. Similar surveys, due later on Wednesday, are likely to show the U.S. economy lost some steam in September even with the Federal Reserve holding fire on interest rates. “There is substantial concern at present that global demand weakness is dampening the economy in the industrial countries,” said Jorg Kramer, chief economist at Commerzbank.
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