Michael Khromov

RUSSIA’S BALANCE OF PAYMENTS IN JANUARY - SEPTEMBER

Russia’s current account surplus was affected considerably by falling exports, whereas imports declined at a slower rate, as compared with the same period previous year. In January–September 2016, net capital outflow in the private sector is reported to be five times less than what it was during the same period previous year, as the rate of repayment of bank debts and liabilities slowed down, as a result of which the rouble appreciated in real terms in January– September 2016 to the level seen early in 2006.

Forecast 2016-2017: Russia’s Economy to Enter a Stabilization Zone

Developments that unfolded in Q1 2016, particularly the decline of crude oil prices down to a 12-year low, may result in worse-than-expected outcomes at 2016 year-end. Unlike the forecast that we made in January, we have revised down our 2016 baseline scenario for GDP growth rates from -1.4% to -2.0%. In recent two weeks the IMF and the World Bank have downgraded their forecasts for Russia’s economy growth rates, too. At the same time, if oil prices n 2017 stay at

The Balance of Payments, Russia's External Debt and the Exchange Rate of the Ruble: A Fragile Equilibrium

40 a barrel, then output is expected to stabilize or even edge up. In other words, it is highly likely that Russia’s economy will move out of a recession in 2016, and in 2017 Russia’s output will enter a zone of positive growth rates. However, this is a stagnation rather than growth scenario due to uncertainty. Furthermore, the forecast dynamics of other key macroeconomic parameters in 2016 suggest that Russia’s economy will stabilize and that the economic downturn, high inflation and high volatility of the Russian rouble will stop.

Оперативный Мониторинг Экономической Ситуации в России. Тенденции и Вызовы Социально-Экономического Развития 2015, #11 (Monitoring of Russia's Economic Outlook. Trends and Challenges of Socio-Economic Development 2015, #11)

Russia’s balance of payments data for Q3 2015 show a considerable decline in her current account balance. In monetary terms, the decline in imports during Q3 was faster than that in exports (relative to Q3 2014). By comparison with Q2 2015, it even demonstrated a slight increase, notwithstanding the weakening of the ruble in July and August. In Q3, for the first time in five years, Russia saw a noteworthy capital inflow into banks and enterprises resulting from a considerable reduction in the volume of overseas assets (which were sold on a major scale in order to raise funds for looming external debt repayments) and the sale of foreign exchange by the population. On the whole, the trends observed during the period January-September 2015 make it possible to conclude that, unless any new external shocks take place, Russia’s current account balance by the end of 2015 will be large enough to guarantee the stability of the ruble’s exchange rate against major world currencies in spite of the huge external debt repayments to be made at the end of 2015.

Current Problems in the Development of the Banking System of the Russian Federation

Russian Abstract: Июнь �?тал в определенном отношении переломным ме�?�?цем в развитии нынешнего кризи�?а в ро�?�?ий�?кой �?кономике. По предварительным данным Ро�?�?тата, в июне прекратило�?ь углубление �?пада в промышленном производ�?тве: индек�? производ�?тва к июню 2014 г. �?о�?тавил 95,2%, в то врем�? как в мае в годовом выражении он �?о�?тавл�?л 94,5%. English Abstract: June 2015 became a critical month in the evolution of the current crisis in Russian economy. According to preliminary data released by Rosstat, in June exacerbation of the crisis in the real sector stopped: production index against June 2014 constituted 95.2%, meanwhile in May it constituted 94.5% in annual terms.

Development of the Banking Sector in Russia in 2011

In 2013 the situation in the banking sector of the RF underwent major changes. On the one hand, the volume indicators of the banking sector continued to grow, although more slowly than before. However, this growth was mainly due to aggressive behaviour of the banks in the consumer lending market, despite actions by the Bank of Russia aimed at reducing the attractiveness to the banks of such loans. On the other hand, there was an increased imbalance in the banking sector related to the non-uniform distribution of liquid funds, the outflow of customers from small and medium-sized banks to larger ones (principally to banks with government participation in their capital). This last factor was strengthened by the Bank of Russia’s efforts to rehabilitate the banking sector by withdrawing the licences of a significant number of banks, including those working in the market of private deposits. Within the framework of this policy of the Bank of Russia, aimed at reducing the number of banks and terminating the activities of any banks violating prudential standards, one should note the necessity for a more integrated approach to the reform of the sector, including measures aimed at increasing capitalisation, and the formation of an institute of systemically important banks with a reduction in the proportion of banks with government participation.

An Onset of Cyclical Growth. Macroeconomic Forecast for 2016-2018

The financial sphere of Russia was the first sector of the national economy which was affected by the global economic crisis of 2008. Financial markets were hit first and then the banking sector experienced the liquidity problem to be followed by a full-scale economic crisis in Russia. Early in 2011, all the factors pointed to the fact that the banking sector overcame the crisis, and it seemed the upward development began. The banking sector had at its disposal huge available resources for expansion of lending to the non-financial sector.