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06.08.2015 20:30 Russia expects to see positive growth in economy next year

Russia is expected to see a positive growth of 2.3 percent in its economy next year, said a leading Russian official. The prediction was given by Russian Economic Development Minister Alexei Ulyukayev while addressing a joint meeting of Russian and Belarusian ministries of economic development held at the Belarusian port city of Brest. Ulyukayev made the prediction based on the average oil price standing at 60 U.S. dollars per barrel, according to an online version of his speech posted at the website of the Russian Economic Development Ministry. The Russian official also said the decline of inflation rate indicated improvement in Russian economy. "We think that the inflation rate will range between 10-10.5 percent at the end of this year, and by the end of the first quarter of 2016, according to our forecast and the forecast of the Central Bank, it will be back to 7 percent," said Ulyukayev. The minister was confident that the economic situation in Russia is getting better and the month-on-month recession is almost over. "We estimate that the economic drop would be 3.4 percent in the first half and 4.4 (percent) in the second half of this year," Ulyukayev said. "We assume this is probably the lowest point."

04.08.2015 11:24 Western sanctions are hitting Russia harder than anyone realized

Sanctions linked to the Ukraine crisis could end up costing Russia 9pc of its gross domestic product, the International Monetary Fund has said. Russia`s economy is showing signs of stabilization after slumping under pressure from Western financial sanctions and Russian counter-measures. Low international prices for its oil exports have added to pressure on the rouble and government finances. "The effects of sanctions in terms of external access to financial markets and new investment technology will linger," the fund said, summing up the findings of a mission in May. Last year Western countries imposed restrictions that limit international financing for major Russian banks and energy companies, and also hi-tech exports to the energy sector. Russia retaliated by banning imports of most Western food products. The fund estimated the immediate effect of sanctions and counter-sanctions had been to wipe between 1pc and 1.5pc off GDP, rising to 9pc over the next few years. These model-driven results were subject to significant uncertainty, it cautioned. The IMF also forecast "weak" economic growth of around 1.5pc annually in the medium term. Russia`s economy was growing around 7pc a year before the 2008 global financial crisis.

02.08.2015 11:57 Economic Growth Picks Up With U.S. GDP Gaining 2.3% In Second Quarter 2015

The Bureau of Economic Analysis released its advance estimate of real gross domestic product for the second quarter of this year - covering April, May and June. The release showed output in the U.S. increasing at a rate of 2.3%. This is a major acceleration from the first quarter when real GDP increased 0.6%. The advance estimate of second quarter GDP confirmed what was broadly expected: the economy bounced back after stumbling out of the gate to start the year, wrote Jim Baird, chief investment officer for Plante Moran Financial Advisors, in a note on the results. While economists on average were anticipating growth of 2.5% in Q2 Baird recommends focusing on the solid improvement. Another positive is the revision to the first quarter GDP reading which now shows expansion rather than a contraction as BEA previously estimated. The second quarter uptick reflects higher rates of personal consumption expenditure, state and local government spending, residential fixed income and more exports. These gains were partially offset by lower federal government spending, private inventory investment and nonresidential fixed investment. Meanwhile imports, which negatively impact GDP, increased.

30.07.2015 12:20 IMF`s Lagarde: World economy is recovering but fragile

International Monetary Fund chief Christine Lagarde says the world economy is recovering but fragile and "faces some downside risks." In an online press conference Wednesday, Lagarde described the United States "a strong performer" and China "resilient" despite a recent drop in Chinese stock prices. She also expressed optimism for the 19 countries that use the euro. The IMF expects the eurozone economy to grow 1.5 percent this year and 1.7 percent in 2016; it expanded just 0.8 percent in 2014. "The euro area is beginning to turn the corner ... We have a more upbeat forecast than we have in a long time," she said. Lagarde called again for Greece`s creditors to reduce its debt burden. She said Greece needs to enact reforms that will make its economy more efficient and expressed confidence the IMF can work with Greece`s left-wing government, which has criticized IMF policies. "There are lots of things that you say (in politics)," she said. "What matters at the end of the day is what you do." Lagarde noted that a drop in worldwide commodity prices is likely to hurt emerging market economies. And the global economy could face fallout if the Federal Reserve raises short-term U.S. interest rates, which it has kept near zero since late 2008.

28.07.2015 15:49 Russian economy decline slows, but recovery elusive

The sharp decline in Russia`s economy may have almost run its course, official data showed on Tuesday, slowed by a huge devaluation of the rouble and heavy government spending on anti-crisis measures. Recovery prospects are cloudy, however, with many analysts warning of a sluggish rebound at best. The economy has slumped as a result of Western sanctions linked to the Ukraine conflict and last year`s collapse in the price of oil. But the decline now appears to arrested. While gross domestic product continued to decline in year-on-year terms in June - down 4.2 percent compared with 4.8 percent in May - seasonally-adjusted output fell just 0.1 percent month-on-month. The figure tallies with other recent data, leading analysts to conclude the decline is close to a bottom - a silver lining to data which still show most macroeconomic indicators sharply down compared with a year earlier. "It is kind of premature to speak about the recovery in sequential terms, which actually lies ahead," said Alexander Isakov, economist at VTB Capital in Moscow. "But in terms of year-on-year comparisons - the headline figure that everybody focuses on - we are bottoming out."

24.07.2015 15:06 Global economy begins second half of 2015 on shaky note

The global economy started the second half of the year on shaky ground as business activity in the euro zone was weaker than expected and China`s vast factory sector appeared to be contracting at the fastest pace in 15 months in July. The surveys come just months after the European Central Bank embarked on a 60 billion euro a month bond-buying programme and as Beijing said it would allow its yuan currency to fluctuate more widely within its trading band as a way to support trade. Markit`s purchasing managers` indexes (PMI) are one of the earliest monthly economic indicators and could dampen hopes that ECB bond-buying and the tumbling euro are boosting growth and driving inflation higher in Europe. Although Athens has accepted the conditions imposed on it by its international lenders, and on Thursday approved a second package of reforms required to start talks on a financial rescue deal, Greece`s brush with bankruptcy meant July was a turbulent month for the euro zone. The euro has sunk more than 9 per cent against the dollar since the start of the year, hit by the ECB`s massive cash injection and fears a Greek exit from the bloc would bring the whole union crashing down. That has made the bloc`s goods cheaper abroad but done little for demand.

21.07.2015 20:07 Iran deal a mixed economic win for Russia

The landmark deal on Iran`s nuclear program that Russia helped steer through marathon talks is a diplomatic fillip for Moscow which will boost trade with Tehran but could also hit much-needed energy revenues, analysts say. Iran and the P5+1 group -- Russia, the United States, China, Britain, France and Germany -- struck an agreement on Tuesday that would progressively lift economic sanctions against Tehran in exchange for limitations on its nuclear program. As an Iranian ally, Moscow appears to have been central in securing the deal and experts say it could help burnish Russia`s international image that has taken a beating over the crisis in Ukraine. US President Barack Obama pointedly praised his counterpart Vladimir Putin for his help, a rare hint of goodwill between the two men locked in a standoff over Russia`s meddling in its ex-Soviet neighbour. "Russia`s biggest victory in the deal is one of prestige," said Sergei Seregichev, a Middle East scholar at the Russian State Humanitarian University. "Who made Iran agree with the United States? It was Russia. Without Russia, there would have been no deal." And once Iran`s sanctions are lifted, Russia -- which has seen its own economy suffer due in part to Western sanctions over Ukraine -- could likely be first in line to win lucrative contracts in key sectors such as energy and transport.

17.07.2015 15:40 Putin knows his military muscle isn`t much without economic muscle

While Ukraine is the central point of conflict between Russia and NATO, economics may be the next battlefront. According to Robert Dannenberg, a Goldman Sachs security analyst and CIA veteran, Russia`s President Vladimir Putin recognizes the importance of gaining power through international economic agencies. "Putin is conservative and nostalgic, but he also understands that it takes more than just rebuilding or modernizing your nuclear arsenal to create a bi-polar world. You need to have economic power," Dannenberg said. Russia seems far from realizing these goals. Lowered oil prices and economic sanctions by NATO due to the Ukraine conflict have crippled the Russian economy in the past few years. The country`s bonds have been downgraded to junk status, and its GDP contracted 1.9% in the first quarter of 2015. It does not seem that Russia is ready to flex its economic muscle. In spite of the weak economy, Russia is attempting to boost its fortune by allying with more friendly economic powers, particularly China, and burgeoning markets.

15.07.2015 11:23 IMF cuts 2015 global GDP forecast as advanced economies lag

Global economic growth will be slower this year than it was estimated two months ago as advanced economies led by the US and Canada are likely to perform weaker, the International Monetary Fund said. The world economic output is projected at 3.3% in the July edition of IMF`s world economic outlook (WEO), down by 0.2 percentage points in the April WEO. The 2016 forecast is kept at 3.8%. IMF said risks to global economic activity are still tilted to the downside. "Near-term risks include increased financial market volatility and disruptive asset price shifts, while lower potential output growth remains an important medium-term risk in both advanced and emerging market economies," the Fund said. "Lower commodity prices also pose risks to the outlook in low-income developing economies after many years of strong growth." Advanced economies together will grow 2.1% in 2015, lower than the April projection of 2.4% while the 2016 growth is seen unchanged from the last estimate of 2.4%.

13.07.2015 12:09 Inflation, unemployment rise sharply in Russia

Russian inflation rose sharply and unemployment increased dramatically in July, indicating that the economic sanctions and its offensive on the border of Ukraine is taking its toll domestically. The Russian Finance Ministry reported last week that inflation rose to 15.5 percent in July, and unemployment increased by 14 percent. AutoVAZ, one of Russia`s top car manufacturers, stopped its production indefinitely, The Daily Beast reported last week. The Russian government, under President Vladimir Putin, is asserting more control over its ruble currency in response to the fallout from the Greek debt crisis and other world economic maladies. The Kremlin is succeeding at keeping the ruble within an "acceptable corridor" while maintaining its reserves and positive trade balance, Putin told a BRICS summit meeting in Russia on July 9th, Bloomberg Business reported. Russia`s economy reportedly shrank by 2.2 percent year-on-year in the first quarter of 2015. Russian economic experts acknowledge the challenges in light of drops within the market, which have plagued Russian assets abroad like in China. "It`s probably premature to say that all of the risks have already been minimized and we`ll soon be enjoying at least a period of recovery," Deputy Economy Minister Nikolay Podguzov said at a St. Petersburg banking conference.


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