Russian Economics And A Look At The Russian Economy




How is Russia doing? The country has no problem making the news but the economics of Russia are not always discussed. Russia is a fascinating country that perseveres in a vast  complex environment and the mix of economic data coming from the country is fascinating. Below is a snapshot on the Russian economy and the experts at FocusEconomics. 
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A preliminary estimate revealed that the economy continued to pick up steam in Q2, with GDP expanding at the fastest pace since Q3 2012. While a breakdown by components is not yet available, the acceleration was likely broad-based as monthly indicators for consumption, investment and exports all performed well in the quarter. Early data for Q3, however, is less positive. Industrial production growth slowed to a four-month low in July, and the manufacturing PMI dropped in August. Meanwhile, the Central Bank took steps to curtail some concerns over Russia’s banking sector in August which included rescuing troubled lender Otkritie, the country’s largest privately-owned bank. Cleaning up the country’s banking sector has become a top priority for officials, as the sector continues to suffer from the effects of the 2015–2016 recession. The Central Bank’s strong financial position means that problems are likely to be contained, and the institution is offering support to other lenders in distress. 

FocusEconomics analysts upgraded their forecasts for the Russian economy this month in light of an upbeat Q2 GDP reading. Rising wages and recovering investment should fuel growth of 1.4% in 2017, which is a notch higher than last month’s forecast. Next year, GDP is seen expanding a stronger 1.7%.  Inflation decreased to 3.9% in July from June’s 4.4%. Reduced price pressures should allow the Central Bank to continue with its easing cycle in the coming months, and all of our panelists forecast another cut in the key rate before year-end. The FocusEconomics panel expects inflation to end 2017 at 4.1% and 2018 at 4.2%.

Agency Rating:
Moody’s: Ba1, Stable
S&P Global Ratings: BB+, Positive
Fitch Ratings: BBB-, Stable

Economic Notes and Infrastructure:
• Substantial oil and gas wealth
• Dependence on oil exports
• Persistent inflation
• Financial system vulnerability
• Rich in natural resources
• Weak democratic institutions
• Rapidly ageing population
• Strong international reserves position

Telecommunication (2015)
Telephones - main lines (per 100 inhabitants): 25.0
Telephones - mobile cellular (per 100 inhabit.): 160
Internet Users (per 100 inhabitants): 70.5
Broadband Subscriptions (per 100 inhabitants): 18.9

Transportation (2014)
Airports: 1,218
Railways (km): 87,157
Roadways (km): 1,283,387
Waterways (km): 102,000
Chief Ports: Kaliningrad, St. Petersburg