Posts Tagged ‘economy’

Is the ruble a basket case or oversold?

December 3, 2014 Comments off

by Chris Weafer, Macro-Advisory Ltd

At mid-session on the first trading day of December, the ruble had declined by 60% against the US dollar since the start of the year (over 70% since the start of 2013), and was down 45% against the euro (55% since January 2013). The obvious questions are: why has the ruble fallen so quickly and by so much? Does this collapse jeopardize Russia’s financial stability and raise the risk of a default? And, how much further can the ruble fall or is this another of those attractive buying opportunities that seem to be available in Russia every seven years?

Is the fall justified?

By most standard measures the ruble’s collapse has been extraordinary. That scale of decline is usually associated with an economy with huge debt obligations, a non-fundable budget and a current account deficit. Russia ticks none of those boxes. Total foreign sovereign debt is only at 3% of GDP, and total private sector foreign debt is at 33% of GDP and falling as a result of the fact that Russian companies are not able to refinance maturing debt on foreign markets. Despite spending approximately $70 bln in a futile defence of the ruble this year, the Central Bank of Russia (CBR) still has $420 bln in foreign exchange reserves, a total which includes $180 bln split between two readily available sovereign wealth funds. At the end of the third quarter the trade surplus was over $150 bln, up over 10% from the previous year, the current account surplus was just short of $60 bln, i.e. double that of 2013, and the federal budget surplus was equal to 2.1% of GDP. Read more…

Trade with Russia

December 3, 2013 Comments off

by Constantin Gurdgiev

The latest data on Ireland’s bilateral trade in goods shows continued strengthening of our trade surplus with Russia. In January-September 2013, Irish exports to Russia amounted to EUR485 million, up on EUR459 million year on year. Over the same period, Irish imports from Russia in goods sectors rose to EUR112 million – an increase of 36.6% year on year. As the result, Ireland’s trade surplus (goods sectors only) reached EUR373 million in the first nine months of 2013, virtually flat on EUR377 million trade surplus recorded in the same period of 2012.

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Some data and ideas on Russian economy

January 17, 2013 Comments off

By Constantin Gurdgiev. First published on

Russian economy quick summary of some latest stats and some disconnected ideas:

  • Q3 2012 real GDP +2.9% y/y down from +4% in Q2 and +4.9% in Q1 2012.
  • Expected Q4 2012 GDP growth +2.5%
  • November 2012 GDP growth of +1.9% y/y inflation-adjusted
  • Q1-Q3 2012 GDP +3.5% y/y
  • Q3 2012 consumption +5.1% y/y down from +6.9% in Q2
  • Expected full year consumption growth +4% y/y.
  • Consumer confidence down to lowest in 18 months (since Q2 2011) in Q4 2012 at -8, Q3 2012 reading was -6.
  • Industrial production is up +1.9% y/y in November, manufacturing activity +4%, manufacturing PMI at lowest level in 14 months in December at 50.0
  • Services PMI down to 56.1, from 57.1 in November
  • Composite PMI at 54.1 – a 4 months low.

Read more…

Video – IMF answering questions from Moskovites about the economy

August 12, 2012 Comments off

IMF asked Moscovites for their toughest questions on Russia’s economy. In response, the IMF’s Antonio Spilimbergo tackles challenges such as oil, funding pensions, growth and transparency for investors. Read more…


Latest Euromoney Country Risk Survey results

August 6, 2012 Comments off

Dr. Constantin Gurdgiev

Recent Country Risk survey by Euromoney shows some interesting trends relating to the Russian economy. Here are the headlines:
“The five economies of the Brics have seen an aggregate ECR score loss of 6.4 points this year, lowering the average score by 3.1 points to 56.8. South Africa (-2 points), Brazil (-1.9) and India (-1.6) have endured the worst declines in sentiment, resulting from concerns about export market conditions, amid waning demand for commodities and increased domestic security risks. However, all five have seen large declines in their economic assessment scores, as contributors have reassessed their expectations for global growth and have acknowledged the slowdown in China’s breakneck pace of expansion.”  Read more…

Russian Banks Credit Supply to SME

May 19, 2012 Comments off

Dr. Constantin Grudgiev

Moody’s latest note on Russian banks, titled SME Lending in Russia: Growth Supports Profitability, but Cyclical Credit Risks Remain is available in Russian.

The note argues that since 2010-2011, Russian banks’ origination of credit to SMEs has grown on the back of banks’ strategic expansion within the SME sector that sees growth in lending to SMEs exceeding that for larger corporates. Read more…

Russian Economy – Inflation & Monetary Policy

May 13, 2012 Comments off

Dr. Constantin Gurdgiev

Russia’s central bank (CBR) refinance rate was affirmed at 8.00% last week, with the overnight deposit rate at 4%, the minimum auction repo rate at 5.25% and the fixed repo rate at 6.25%. Per Danske Markets, “the CBR stated that it views rates as being acceptable for the coming months as inflation pressures arise in H2 12.”

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