Contents tagged with Economy of Russia
Capital outflow from Russia reaches record level since annexation of Crimea
Foreign investors are continuing to withdraw capital from the Russian equity and bond markets due to the tightening of Federal Reserve System (FRS) policy, the European Central Bank scaling down carry trades, and the risk of a global trade war. Over the week ending June 20, the sell-off rate of Russian securities by non-residents doubled, finanz.ru reports, citing data from EPFR Global (Emerging Portfolio Fund Research).
Cumulatively, foreigners withdrew $520 million, a record amount since …
Economic crisis eliminates 20% of middle class in Russia
The Russian economy’s longest recession in 20 years has eliminated 20% of the middle class and made savings a luxury unavailable to the overwhelming majority.
In May 2018, only 19% of Russians belonged to the middle class, that is, people who can easily buy not only clothing and food, but also durable goods. Before the start of the crisis it was 24%, and the current proportion is the lowest in 5 years, data from a NAFI survey indicates.
In fact, the middle class is even smaller: a salary of …
Russia’s Central Bank predicts sanctions and stagnation
Over the next three years, the rate of economic growth in Russia will be half of the world average, and sanctions from western countries will persist, restricting the flow of foreign capital, without which it will be necessary to rely solely on internal resources.These were Russia’s Central Bank’s (CB) assumptions in the projection of the “Primary areas of development of the financial market” until 2020.
No significant acceleration of the Russian economy is foreseen. The CB predicts that the …
Hundreds of Russian banks are at risk of collapse
Based on the results of Russia’s Central Bank stress tests, problems were identified in 117 banks. There exists a risk of a gap appearing in their capital if oil prices go down sharply. Moreover, the bankruptcy of several organizations can lead to a domino effect that will affect another 107 banks, RBC reported with reference to the report of the Russian banking regulator.
According to the Central Bank of Russia, these 117 banks account for about 30.6 percent of all banking assets. The Central …
$41 billion transferred out of Russia in one year
Russian businesses’ and the wealthiest citizens’ funds continue to flow into offshore zones through the sale of company shares and the issuance of loans, Russia’s Central Bank reported.
In the last year, $42 billion (2.5 trillion rubles) flowed out of Russia into offshore accounts. This was 15% more than the federal budget spent to support the national economy, and twice as much as the amount allocated to education and healthcare combined. Cyprus remains the “magnet” attracting Russian money, …
Net capital outflow from Russia reaches $21 billion in four months
The net outflow of the Russian private-sector’s capital was estimated to be worth $21 billion from January-April 2018, showing a 17% growth compared to the same period last year, according to data from the Bank of Russia, which was published Monday, May 14.
“Unlike the previous year, net lending was mainly accomplished due to an increase of foreign assets in other sectors with little impact of banking sector operations,” a bank representative reported.
The capital outflow for the first four …
Kremlin prepares for total economic isolation
The Russian presidential administration and government are preparing for a further tightening of the anti-Russian sanctions as was the case with Venezuela, Iran and North Korea, with a ban on investing in state debt, the blacklisting of state banks, making it impossible to conduct transactions in dollars, and the exclusion of Russia from the SWIFT interbank transfer system, RBC news agency reports with reference to two federal officials familiar with the discussion process, and a source close …
Putin asks Russians 'to be patient'
Russian President Vladimir Putin said during a live broadcast on Russian federal television on Friday that citizens of Russia should not expect that all the problems that have arisen in the country, particularly in its economy and social spheres, will be resolved immediately.
"You, Russian citizens, are right to speak about low incomes, faults with the healthcare system, housing, utilities and other things as well," Putin said, stressing that after winning the election he feels "a need to …
Russia’s largest private bank believes the country is losing GDP annually due to sanctions
The largest private bank in Russia estimated that the Russian economy lost 0.5% of GDP due to sanctions. Because of this, the entire positive effect of the actions of the Central Bank has been negated.As indicated in the report of the chief economist of Alfa Bank, Natalia Orlova, the losses are caused by diminished possibilities in attracting financing from abroad as a direct result of the sanctions on certain companies.
The current US sanctions impose significant restrictions in the provision …
Media: Foreign business fleeing Russia in 3 year record
Foreign business has drastically reduced its investment in the Russian economy according to the Russian Central Bank’s statistics on the balance of payments for 2017, finanz.ru reports.
At the end of the year, the flow of foreign investments, i.e. the investment in the real sector as open business or the purchase of shares in companies has fallen by 25%.
In the fourth quarter, non-residents who had operated in the Russian market wrapped up operations and sold shares, after which they withdrew …