Economy 52,844 Posted August 11, 2014 Share Posted August 11, 2014 http://m.us.wsj.com/articles/russian-economy-avoids-slipping-into-recession-in-second-quarter-1406296121?mobile=y Russia managed to just barely avoid recession as its economy shrank 0.5% in the first quarter but grew 0.1% in the second quarter avoiding a technical recession. Despite an economy weakening as a result of sanctions and low investor confidence, instead of lowering interest rates to stimulate the economy, they have been forced to raise interest rates... Low investor confidence and outflows of investments has resulted in a significant weakening of the Russian Currency (Rouble) which has resulted in high inflation. They have risen rates 3 times this year to defend the value of the currency and keep inflation in check In the latest move the key rate was raised from 7.5% to 8.0% Link to post Share on other sites More sharing options...
The Professor 1,060 Posted August 11, 2014 Share Posted August 11, 2014 When will their economy really start dying Link to post Share on other sites More sharing options...
MJHolland 12,725 Posted August 11, 2014 Share Posted August 11, 2014 I'm not surprised and I'm not concerned either Get a load of that stagflation though :nooo: :nooo: :nooo: Link to post Share on other sites More sharing options...
Alex C 254 Posted August 11, 2014 Share Posted August 11, 2014 I wanna take this opportunity and honestly thank you for your quality posts, which are always relatable to me, and other socially and politically aware members of our community here! much love, Alex Perform Living Link to post Share on other sites More sharing options...
RAMROD 117,029 Posted August 11, 2014 Share Posted August 11, 2014 Dis mean Putin cannot be an @$$ no more? (ﾉ◕ヮ◕)ﾉ✧*:･ﾟ ᶠʳᵒⁿᵗ ᵗᵒʷᵃʳᵈ ᵉⁿᵉᵐʸ (*´艸｀*) ♡♡♡ Link to post Share on other sites More sharing options...
Reno 79 Posted August 11, 2014 Share Posted August 11, 2014 I hope their economy will fail so that they can't fund their army no more... http://euromaidanpress.com/2014/08/11/russian-colonel-zhirinovsky-threatens-total-annihilation-of-baltics-poland/ Link to post Share on other sites More sharing options...
Economy 52,844 Posted August 11, 2014 Author Share Posted August 11, 2014 Dis mean Putin cannot be an @$$ no more? not necessairily. Unless their finances were so bad they could no longer fund their military they can still be an ass. Also their economy is around $2 trillion in size (roughly the same as Canada) so it has a major impact WW Still this makes things harder from them because high, inflation, really weakned currency forced them to raise rates to try to fight the currency problem. But when the economy is weak they are suppostu lower rates but in their case they cant do that. The highly innapropriate interest rates are taking a toll on the econony. As well as the sanctions. Also besides lower revenue from weak economy, the higher rates and low investor confidence means they are paying higher interests on their debt So both their finances are economy and being strained. But not bad enough to make them irrelevant for now :MANiCURE: Link to post Share on other sites More sharing options...
bumblebee 2,528 Posted August 11, 2014 Share Posted August 11, 2014 They probably raised the key interest rate because there are thousands of speculations going on which assume that the prices for the "sanction-related" groups of products will go higher this fall and in the upcoming winter. In other words, they have strong expectations that inflation is going to rise even more. About the growth of Russian economy: ever since Q1 of 2013 the growth rates have been slowing down. And the reason is simple: their whole model of growth needs certain change and evolution, a fact which the government seemingly can't recognize. Link to post Share on other sites More sharing options...
Economy 52,844 Posted August 12, 2014 Author Share Posted August 12, 2014 They probably raised the key interest rate because there are thousands of speculations going on which assume that the prices for the "sanction-related" groups of products will go higher this fall and in the upcoming winter. In other words, they have strong expectations that inflation is going to rise even more. About the growth of Russian economy: ever since Q1 of 2013 the growth rates have been slowing down. And the reason is simple: their whole model of growth needs certain change and evolution, a fact which the government seemingly can't recognize. #1 its not pure speculation. The Rouble HAS fallen a lot in value and inflation is high so to try and figt those two problems they keep raising rates #2 they have a lot of long-term issue such as bad demographics with aging population and low birth rates but they refuse to let in more immigrants... They are too dependsnt on oil and natural gas and dont make other sectirs competitive They also need to have a more free market. That being said the past 6 months they have been doing worse because of this whole situation. This recent currency and inflation crisis as well as borderline recession has more to do with the immediate problems rather than their long-term issues! :coffee: Link to post Share on other sites More sharing options...
Economy 52,844 Posted August 12, 2014 Author Share Posted August 12, 2014 I wanna take this opportunity and honestly thank you for your quality posts, which are always relatable to me, and other socially and politically aware members of our community here! much love, Alex awe thankyou :hug: Link to post Share on other sites More sharing options...
Enigmatica 0 Posted August 12, 2014 Share Posted August 12, 2014 Hope it goes bankrupt unless Putin resigns and is jailed Link to post Share on other sites More sharing options...
Economy 52,844 Posted August 12, 2014 Author Share Posted August 12, 2014 Hope it goes bankrupt unless Putin resigns and is jailed they have a $400 billion wealth fund they can tap into if things get really tight :awkney: Link to post Share on other sites More sharing options...
Enigmatica 0 Posted August 12, 2014 Share Posted August 12, 2014 they have a $400 billion wealth fund they can tap into if things get really tight How long can such a gigantic state last with that sum though? Link to post Share on other sites More sharing options...
Tommymonster44 0 Posted August 12, 2014 Share Posted August 12, 2014 History has shown that economic punishment does not keep countries like Russia in line. These sanctions are just PR stunts, tbh. Link to post Share on other sites More sharing options...
Economy 52,844 Posted August 12, 2014 Author Share Posted August 12, 2014 How long can such a gigantic state last with that sum though? well thats equivalent to 20% of their GDP. Their econoy is about the same size as Canadas (even tho they have 4 times the population) and i can tell you $400 here in Canada would do us good for quite some time! Their budget was almost balanced. So even if they start running a deficit of 6% of GDP (which is quite high), the fund would still last them 10 years Also their debt isnt huge as it is so they can still accumulate more debt on top of the fund they own So they are ok for a while. Unless this crisis lasts another 15 years :toofunny: Link to post Share on other sites More sharing options...
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