PHOTO: Valery Melnikov / RIA Novosti
Gazeta.ru / Translation
Moscow, March 17 – On Friday, 18 March, the Bank of Russia will decide on the level of the key rate. Economists have urged the government and the Central Bank to change course and start to stimulate growth through softer fiscal and monetary policy. At the same time the Central Bank decides for himself one task – to reduce inflation to the target value of 4% by the end of 2017./span>
The majority (23 of 31) of those surveyed economists and portfolio managers believe that the Board of Directors of the Bank of Russia on March 18 will leave the key rate unchanged, indicates the consensus forecast RBC. Economic growth in this pales into insignificance./
Chairman of the Bank of Russia Elvira Nabiullina believes that the need to stimulate growth through structural reforms and improve the investment climate.
At the previous meeting in January the Central Bank made a hard comment to the current situation of inflation, virtually eliminating the possibility of a rate cut in the near future, but assuming its increase.
Rising prices on the results of February, according to that in March the inflation rate continued to decline According to Rosstat, slowed to 8.9% year on year against 12.9% in December 2015. The weekly rate of inflation, according to Rosstat, to March 14 slowed to a normal level of 0.1%, inflation was 7.4% in the year.
More than nine thousand sorties since the end of September last year, when by order of the Supreme Commander Vladimir Putin began operation in Syria.Massive strikes against terrorists and their infrastructure, high-precision weapons. On the eve of the results achieved at the meeting of Vladimir Putin, reported Defense Minister Sergei Shoigu
There is great scope to reduce interest rates, as would occur (once, stretched, with some steps) – it is the competence of the Central Bank. I say only that the opportunity is obvious, it is a fact “, – says Minister of Economic Development Alexei Ulyukayev.
There is great scope to reduce interest rates, as would occur (once, stretched, with some steps) – it is the competence of the Central Bank. I say only that the opportunity is obvious, it is a fact “, – says Minister of Economic Development Alexei Ulyukayev.
Meanwhile, the chief economist at Alfa Bank, Natalia Orlova, notes that the current situation in the markets and in the economy favors a rate cut, but the January communiqué makes it impossible.Meanwhile, the chief economist at Alfa Bank, Natalia Orlova, notes that the current situation in the markets and in the economy favors a rate cut, but the January communiqué makes it impossible.
In total, with the support our aviation Syrian troops liberated the 400 settlements and more than 10 thousand square kilometers of territory. On the territory of Syria, destroyed more than two thousand criminals, immigrants from Russia, including 17 warlords. our air force destroyed 209 oil production facilities, processing and transfer of fuel, and 2912 as the means of delivery of petroleum products, or, as they are also called, “nalivnikov”, – said Sergey Shoigu.
It should be noted that the central banks of other leading economic powers in the world have policies opposing Russia. They are primarily concerned with stimulating economic growth, creating new jobs and encouraging inflation, which in the US or the EU is lower than 2% per annum. Key rates there are at minimum levels (below 1%), while interest rates on deposits for commercial banks generally negative (so that the latter do not keep money in the accounts of the regulators, and lend to the economy). The European Central Bank at the last meeting on March 10 lowered its key rate from 0.05 to 0% per annum.
Against the backdrop of the slowdown of the Chinese economy (in the last year, GDP grew by 6.9%, the minimum value for 25 years), the People’s Bank in the past two years significantly expanded the volume of lending of the national banking system.
According to NSC statistics, in January 2016 the volume requirements for banks reached 5.2 trillion yuan, compared with 2.1 trillion yuan in January 2014. Since November 2014 the People’s Bank of China six times reduced the indicative interest rates on operations of national banks. In addition, one of the main instruments of the expansion of liquidity of the banking system in the Chinese environment is to reduce the rate of reserve requirements.
In March this year, the NBK announced another reduction of reserve requirements (from 17.5 to 17%), which is equivalent to the provision of banking resources in the amount of about 685 billion yuan (about $ 105 billion).
Characteristically, the monetary authorities themselves consider their country’s policy of “moderate”, that is, lower interest rates and credit expansion in the current environment is regarded primarily as a means of ensuring economic stability.
Of course, the Russian Central Bank due to the high inflation rate may not drop to a level close to zero, or to follow the Chinese recipes.
But it is clear that the time has come to begin a rate cut and easing of monetary policy, since the state of the domestic economy is rapidly deteriorating.
“”The Central Bank, which would have no purpose, he put, you should always seek a balance between the objectives of inflation and support the economy. Slowing inflation clearly said in recent months that the promotion of economic growth must now be a priority. Amid falling demand, as well as wages and income, even low inflation will not be an advantage. Realization of investment projects under the current financial conditions is impossible, both because of the unavailability of loans and because of falling demand, and without easy access to credit economy is not able to enter the trajectory of growth “, – says Sergey Zaversky, head of the Institute for Complex Strategic Studies (ICSS ).
The consensus forecast “Development Center”, the HSE assumes a reduction in the economy in 2016 by 1.5%. VEB chief economist Andrei Klepach not exclude the fall of GDP and up to 2%. The following year, forecasts are also quite cautious: economists expect minimal growth (less than 1%).
It is a negative situation with the income of the population and in the consumer sector. The fall is counted in double digits (over 10% in the last year). Alexei Ulyukayev said that in January – February 2016 the decline of retail trade is less than last year, but still he was 7%, which can hardly be considered a good indicator.
Russians virtually stopped buying expensive goods. Average Russians check on the results of the campaign to the store on the results of February showed an absolute anti-record ever recorded.
At the end of February, the average check of Russians dropped by 13.5% and amounted to only 499 rubles. Such data are research holding “Romir”, whose analysis of the market is held by “Gazety.Ru”.
“In February this year the average check” thin “at once by 13.5% compared to January’s figures and amounted to 499 rubles. Even in the context of the year its fall was slightly less – 12.5%. In fact, the size of the average check back to the state two years ago. Such a sharp drop in the average check is not never seen in all the years of measurements. A record drop in the average check has shown in major cities – pyatisottysyachnikah and over one million, where it fell to a record low values for all years of observations. Also, the biggest losses were suffered by the average check in hypermarkets, showing in February, the unprecedented low value for the last four years “, – noted in the” Romir “.
All this is a consequence of budget cuts policy (Ministry of Finance in the current year have already announced reduction of 10% of the costs) and tight monetary policy.
The key rate is at 11% means that the final rate for borrowers from the real sector in commercial banks is 15% per annum and above. The interest rate on consumer loans now above 20%., – summed up Vladimir Putin.
Naturally, the fixed investment and consumer demand can not grow. At the end of last year, capital investment, according to Rosstat, fell by 9.4%. Business activity is practically reduced to zero. Inputs to the markets closed, because loans are not available. But the share of public sector in the economy, according to some estimates, over 70% of GDP. Significantly worsens the situation of small an d medium-sized businesses – its contribution to GDP and employment is around 25% in developed countries – 50% or more.
Vadim Geraskin, Deputy Director General for Relations with state bodies “Basic Element”, also believes that the business can not exist without the investment, ie, cheap and long loans. “Just being able to invest in the development of new industries and upgrading, you can reorient the economy from exports of raw materials to create products with high added value is already here in the country”, – says Geraskin..
Even if we reject the subjective and emotional evaluations, the current situation in the Russian economy can be described as a crisis..
And this crisis is not only due to the fall in oil prices and Western sanctions, but “pro-cyclical” policy of the government and the Central Bank, which in the current environment does not stimulate growth and deepens the extent of the fall.
Alternatives to the current exchange rate and ideas quite a lot. For example, the program “Economy of Growth”, prepared by the Stolypin club. Subject to review of its recently commissioned Prime Minister Dmitry Medvedev.
At the core, and this, and other programs are simple ideas. The economy needs long cheap money, low business taxes, the lack of administrative barriers and state aid in the development of key economic sectors and support of non-oil exports.
Naturally, the primary task is the rejection of the objectives for the conservation of low budget deficit and reducing inflation sake. Go this way the Russian authorities advise not only many domestic, but even Western economists.
Nobel laureate Eric Maskin in an interview with Bloomberg says to use “old-fashioned Keynesianism” and the need to invest in innovation.
“When the economy goes into a recession, with which we are dealing in Russia, the government is beneficial to temporarily maintain the deficit and give the money to the needy, because it will help stimulate the economy and help to get out of recession”, – he believes.
We need investment in innovation in order to remove Russia from the oil needle, not a zero budget deficit. “It is very bad that this had been done earlier, but better late than never”, – said Eric Maskin. However, the Central Bank and the government prefer to work on other boards. What they produce, can be seen in Greece or the Ukraine, where the crisis has become a daily reality, and from industry were alone memories.
Source: http://www.gazeta.ru/business/2016/03/17/8127587.shtml