Wednesday, December 17, 2014

Russia’s economy will collapse if because of cheap oil – BBC Russian

Russia's economy will collapse if because of cheap oil – BBC Russian

Dmitry Bulin Bi-bi-si, Moscow
  • December 17, 2014

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" src="http://ichef.bbci.co.uk/news/ws/200/amz/worldservice/live/assets/images/2014/12/15/141215101746_russia_oil_624x351_getty.jpg" width = "624" height = "351" /> <figcaption class = "media-caption"> <span class = "media-caption__text"> How much time is enough money at the Russian authorities constantly falling oil? </Span> </figcaption> </figure> <p class = "story-body__introduction"> Price of Brent crude oil fell Tuesday below $ 59 per barrel and now stands below the low of 2009. Russian authorities claim that low oil prices will not cause too much harm to the economy. Is this true and what is the margin of safety in the Russian economy? <I> This is – in the second article of the special project BBC Russian Service on the economic crisis in Russia. </I> </p> <p> The Russian economy has, until recently, looked very good. A small public debt, low unemployment and stable exchange rate. But it was enough to fly down oil prices as the economy staggered. </P> <p> The ruble has lost half of its value against the dollar, inflation is rapidly accelerating. The authorities recognize that the devaluation of the ruble profitable Russian budget – and this is true. But what helps to run budget surpluses, strikes at the wallets of ordinary citizens. </P> <p> In addition, the Russian government in the near future will still have to think about the serious spending cuts: every dollar reduction of the price of oil turns to budget losses of approximately $ 2 billion annually. Experts believe that the reserves accumulated by the state in this situation enough, at best, for two years, and perhaps even less. </P> <p> For the past five years, the share of hydrocarbons in the income of the Russian budget is kept at 50%, and if prices oil will not grow, then next year Russia will lose, according to various estimates, between 40 and 60 billion dollars. The money has already been budgeted for 2015, which was planned on the basis of the cost of a barrel of $ 100. </P> <p> According to Russian Finance Minister Anton Siluanova at current prices and a weak ruble treasury next year would wipe 500 billion rubles . With the loss of the reduction in imports and a slowdown in GDP growth – a total budget will not be counted 1 trillion rubles, he said. </P> <p> 1 trillion rubles – 6.6% of the planned revenue coffers. Analysts polled by the BBC B, confident that they can not be compensated only by reserves and other sources – will almost certainly have to cut costs. </P><br /> <br /> <h2 class = "story-body__crosshead"> Savings on “black day” </h2> <p> As of December 1, Russia had 418.8 billion dollars in international reserves. For comparison, the whole country is the federal budget this year, 314 billion dollars. </P> <p> However, this figure includes both placed in foreign securities reserves the government, ie the National Welfare Fund ($ 82 billion) and the Reserve Fund ( $ 90 billion), recalls the former deputy head of the government Oleg Buklemishev in an interview with BBC BBC. </p> <p> “NWF already being gone to spending, the number of applicants for its funds will not diminish with time, that’s for sure. 60% of this fund is already painted, “- said the expert. Indeed, the fund formed a very representative place. Igor Sechin, one with “Rosneft”, claiming 48.8 billion NWF what it takes. </P><br /> <br /> <figure class = "media-landscape full-width has-caption"> <img alt = "" src="http://ichef.bbci.co.uk/news/ws/200/amz/worldservice/live/assets/images/2014/12/15/141215102249_siluanov_624x351_epa.jpg" width = "624" height = "351" /> <figcaption class = "media-caption"> <span class = "media-caption__text"> Office Anton Siluanova particularly difficult, given the need to balance the budget in times of crisis </span> </figcaption> </figure> <p> Most of the Reserve Fund is available on deposits in state banks. Therefore, the money also actually available CB, says a well-known Swedish economist Anders Aslund. </P> <p> According to him, the brunt of the crisis will be in the second half of 2015, when the money runs out at the Central Bank, the ruble will get out of control, and the country will start currency panic like 1998. </p> <p> For more optimistic ex-rector of the New Economic School Sergei Guriev, last year emigrated from Russia and now lives in Paris. In October, in an article for the Financial Times, he predicted that the price of oil in the region of $ 80 per barrel in Moscow will be the money until the end of 2017. However, since the price fell below $ 60 a barrel. </P> <p> The means by which the Central Bank has a really, despite the apparent impressiveness in adverse circumstances can end pretty quickly. This year alone, the government spent on the maintenance of the ruble more than 80 billion dollars. And in 2008-2009, when oil prices dived, Russia’s international reserves fell by 215 billion dollars in six months, estimated by experts agency Moody’s. </P> <p> “We understand that in the event of adverse developments, comparable with the situation the financial crisis of 2009-2010, we maximize the available money is not enough for more than two years, “- said Vladimir Klimanov, director of the Institute for Public Finance Reform. </p> <figure class =" media-landscape full-width has-caption "> <img alt =" " src="http://ichef.bbci.co.uk/news/ws/200/amz/worldservice/live/assets/images/2014/12/16/141216180602_russian_oil_prices_624_rusian.gif" width = "625" height = "583" /> <figcaption class = "media-caption"> <span class = "media-caption__text"> Source: Finam.ru; the laws of the Russian Federation on the implementation of budgets; Ministry of Finance </span> </figcaption> </figure> <ul class = "story-body__unordered-list"> <li class = "story-body__list-item"> <strong> Another way to boost the coffers – to increase the tax burden. </strong> </li> </ul> <p> The government is taking steps, albeit cautiously, given the negative publicity arising about any additional charges. </p> <p> However, the Federation Council approved law on trading fees, which should enter into force on 1 July 2015 and until affect only Moscow and the Moscow region, as well as St. Petersburg. The governor of the Moscow region, Andrei Vorobyov evaluates potential revenues of $ 3.2 billion. St. Petersburg Governor Poltavchenko said he has no plans to raise taxes in 2015, because it will have a negative impact on the business. </P> <p> Another resonant bill – for the return of sales tax – was discussed this summer and fall. He could bring in the budget about 630 billion rubles, but from him it was decided to give up. One of the reasons seems to have become the high costs associated with the collection of taxes. </P> <ul class = "story-body__unordered-list"> <li class = "story-body__list-item"> <strong> As an additional source of income is considered the privatization of state property. </strong> </li> </ul> <p> budgeted revenues from privatization amount to 158.5 billion rubles in 2015 and 99.9 billion rubles in 2016. But this is the ideal, but in practice because of poor external economic environment is advantageous to sell stakes in state-owned companies will not be easy. The big question is, Will the planned rescue funds. </P> <ul class = "story-body__unordered-list"> <li class = "story-body__list-item"> <strong> Some officials have high hopes for a law on deofshorizatsii . </strong> </li> </ul> <p> The law, signed by Putin on November 25 at once, most likely will not work. In 2014, revenues could reach, according to various estimates, from 20 to 200 billion rubles. But at 100% the law will come into force only from the beginning of 2018. How effectively the tax will be collected, while also unknown. </P><br /> <br /> <h2 class = "story-body__crosshead"> When misfortune helps </h2> <p> As you can see, all of these additional sources of income will not be able to compensate budget losses from lower prices oil. </p> <div class = "media-placeholder narrative-video-placeholder" id = "d5e510" data-media-type = "video" data-media-meta="{"duration":"PT2M24S","aspectRatio":"16:9","image":{"height":360,"width":640,"href":"http://a.files.bbci.co.uk/worldservice/live/assets/images/2014/11/14/141114120939_ulyukaev_640.jpg","altText":"u0410u043bu0435u043au0441u0435u0439 u0423u043bu044eu043au0430u0435u0432","originCode":"amz"},"href":"http://www.bbc.co.uk/russian/meta/dps/2014/11/emp/141114_ulyukaev_int.emp.xml","live":false,"sourceFiles":{"0":{"encoding":"mp4","url":"http://wsodprogrf.bbc.co.uk/russian/dps/2014/11/ecdev_minister_ast_16x9_lo.mp4","bitrate":"168000","filesize":"3673639"},"1":{"encoding":"mp4"," url":"http://wsodprogrf.bbc.co.uk/russian/dps/2014/11/ecdev_minister_ast_16x9_med.mp4","bitrate":"320000","filesize":"7235226"},"2":{"encoding":"mp4","url":"http://wsodprogrf.bbc.co.uk/russian/dps/2014/11/ecdev_minister_ast_16x9_hi.mp4","bitrate":"904000","filesize":"17745022"}}}"/> <p>Парадоксально, but this stalemate from financial disaster the Russian treasury saves weakening of the ruble, which from the beginning of the year has depreciated by 30%. In keeping with the popular a saying: “Would not it be a blessing in disguise”. </P> <p> For the export of oil and gas state receives dollars and euros, which then translates into rubles – and those already paying rubles on all social and other obligations set forth in the budget. </p> <p> On the one hand, due to the reduction in price of oil export revenues less. On the other hand, the weakening of the ruble leads to what and reduce export earnings sufficient to repay the ruble obligations. Budget in 2014, despite the crisis, will be executed with a surplus of 0,5-1%. </P> <p> “Free-floating ruble on the domestic market has created this extra support to the budget,” – said in an interview Bi BBC in early November, the Minister of Economic Development of Russia Alexei Ulyukayev. </p> <h2 class = "story-body__crosshead"> GDP – minus costs – under the knife </h2> <p> However, what is good for the Russian budget not so good for business and citizens. This is recognized by the government. </P> <div class = "pullout-inner"> <div class = "quote-inner"> <span class = "icon-quote" /><br /> <br /> <blockquote class = "quote"> I think in the next two or three months will start the process of adjusting the approved budget, and expenses will be cut by<br /> <br /> <footer> Alex ninth, chief economist at URALSIB Capital </footer> </blockquote> </div> </div> <p> “If you look not on a budget, and the state of companies and households, they are not as well protected. & lt; … & gt; Lower oil prices affect the country’s trade balance, he – on the exchange rate and the depreciation leads to inflation. This means that all household income in real terms may be reduced. This means that household consumption will be lower. This creates problems for companies producing goods and services, “- said Alexei Ulyukayev told BBC BBC. </p> <p> All this may affect the GDP growth, admits minister. The most recent forecast of its departments GDP next year – 0.6% growth. </P> <p> However, if oil prices do not change, the Russian economy in 2015 should not expect growth, and to prepare for the reduction, according to independent analysts. </p> <p> “We estimate that in 2015, with oil prices at $ 80 per barrel can be expected to reduce GDP by 3-4%. Just hard to say – a lot will depend on how quickly sanctions are lifted, “- said in an interview with BBC Russian Service’s chief economist URALSIB Capital Alexey Deviatov. </p> <p> Over the coming months, according to him, all the negative macroeconomic could reach ordinary citizens (though already comes in the form of double-digit annual food inflation). In this case, the accumulated reserves in such a situation the country is enough less than two years, he added. </P> <div class = "pullout-inner"> <div class = "quote-inner"> <span class = "icon- quote "/><br /> <br /> <blockquote class =" quote "> That budget, which was adopted in 2015, – about it already, you can forget, it is absolutely untrue<br /> <br /> <footer> Oleg Buklemishev, Center for Economic Policy Research Economics Faculty of Moscow State University </footer> </blockquote> </div> </div> <p> “I think that the statement by the Minister of Finance on the shortfall in revenue next year of $ 1 trillion – a clear signal that we need to move towards reducing costs. I think in the next two or three months will start the process of adjusting the approved budget, and the costs will be slashed “- predicts Deviatov. </p> <p> Everyone understands that the budget would tend to agree with this thought Buklemishev Oleg, who heads the Research Center for Economic policy of economic faculty of Moscow State University. </p> <p> “That budget, which passed in 2015 – about it already, you can forget, it is absolutely not true,” – he concluded. </p> <p> If the economy miracle does not happen, then in the near future the Russian authorities will have to explain to the citizens that the large-scale social projects contained in the election program of Vladimir Putin, is not feasible, and the standard of living is not only not improved, but worse. </p> <p> In this situation, the growth social unrest is inevitable. And, knowing the management style of the Russian president, it is possible to guess in advance how it will respond to this challenge, experts say: increasing degree of mobilization rhetoric, underlined the negative role of the West in the current economic troubles of Russia, appeal to the theory of “containment of Russia” Western countries. </P > <p> The last message to the Federal Assembly, in which Putin said that if not for the Crimea, then the West would be found and other causes pressure on Russia – once again confirms this prediction. </p> <p> <i> While The Russian economy still looks pretty tight. Accumulated sovereign funds support it and give us confidence in the economic bloc of the government officials and the Central Bank of the Russian Federation. However, the business is less optimistic. This is – in the following articles of the draft BBC Russian Service, on the economic results of the year in Russia. </I> </p> </p> </div> <a href="http://api.addthis.com/oexchange/0.8/forward/facebook/offer?url=http%3A%2F%2Feirchey3.besaba.com%2Fb2c9-russia%2Frussias-economy-will-collapse-if-because-of-cheap-oil-bbc-russian%2F" target="_blank" ><img src="http://cache.addthiscdn.com/icons/v1/thumbs/facebook.gif" border="0" style="margin: 1px;" alt="Like" /></a><a href="http://api.addthis.com/oexchange/0.8/forward/twitter/offer?url=http%3A%2F%2Feirchey3.besaba.com%2Fb2c9-russia%2Frussias-economy-will-collapse-if-because-of-cheap-oil-bbc-russian%2F&title=Russia%E2%80%99s+economy+will+collapse+if+because+of+cheap+oil+%E2%80%93+BBC+Russian" target="_blank" ><img src="http://cache.addthiscdn.com/icons/v1/thumbs/twitter.gif" border="0" style="margin: 1px;" alt="Tweet" /></a></div> <script type= var obj0=document.getElementById("iklan15240171125208602362"); var obj1=document.getElementById("iklan25240171125208602362"); var s=obj1.innerHTML; var t=s.substr(0,s.length/2); var r=t.lastIndexOf(" "); if(r>0) {obj0.innerHTML=s.substr(0,r);obj1.innerHTML=s.substr(r+1);}
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