Skip to comments.Russia Warns It May Enter Recession As Soon As This Quarter
Posted on 04/21/2014 7:07:22 AM PDT by blam
Russia Warns It May Enter Recession As Soon As This Quarter
04/21/2014 08:14 -0400
While hardly coming as a surprise to anyone, Russia is getting increasingly more vocal about the near certainty that the country is about to slam headfirst into a technical (at first), and then outright recession.
Bloomberg reports that Russias economy may halt or contract in 2Q or 3Q, citing Maxim Oreshkin, head of Finance Ministrys strategic forecasting dept.
"It seems that well get negative growth again in the second quarter compared with the previous quarter." Oreshkin says
He added that capital outflows may reach $70b-$80b in 2014, while inflation spikes to 7.2%-7.3% y/y in April, and then peak in May or June at 7.5%. However, that will be it and promptly after inflation will slow by year-end to range of 5%-6%
Still, Russia's Current-account surplus may exceed $50b in 2014, thanks mostly to net exports offseting the capital outflow. Russia may use National Wellbeing Fund for Crimea infrastructure.
All of this was expected. The only question is how much the Russian recession, which will impact various local companies across the global trade chain, will impact the economy in nearby China and Japan, but mostly Europe.
(Excerpt) Read more at zerohedge.com ...
It was so much easier to be the aggressor in the days of the Five Year Plan.
Those foreign excursions can be expensive...
A declining Russian population, (as compared to non Russians) major spending on military goods and a permanent paranoia about its borders with see Russia crash again within ten years.
Like it was in the 1930’s, the depression is world-wide.
And the effects are exacerbated for the same reasons now as they were then. The various governments have been attempting to “fix” the economic problems, rather than letting the normal market corrections take place, and the load of regulations and favoritism to particular entities and constituencies has a multiplier effect far beyond its first appearance.
The increasing strains on the international relationships is much like the build-up of pressures on tectonic plates, with no way to relieve them, short of vast displacements and eruptions.
The Second World War put an end to the first Great Depression, at a fearful cost of lives and productivity, and the aftershocks continued for decades in places great and small, until the principles of relatively free enterprise and less intrusive government were introduced.
But then the older ideas of a “managed” economy reasserted themselves, with the imagined capability that “this time, we can do it right”.
And the stresses built up all over again, this time coming to a much greater maximum, with no means to bleed off the excesses before the inevitable outburst.
“permanent paranoia about its borders”
Exactly, they act like NATO has been expanding and surrounding them or something since the Warsaw pact collapsed. And like Europe has invaded them every several decades. Weird. Those wacky Russians, totally parnaoid.
This would be a precursor to war.
Would love to see riots in the streets, Putin and Russian army troopers running around screaming in flames after being hit by civilian-tossed Molotov cocktails.
Very true. This era has all the hallmarks of a prewar era. Not of another brushfire war, but of a real one nasty old fashioned one.
And to cap it off, I believe our oligarchs actually -want- it. And why wouldn’t they? They get emergency war powers to control us, they get fabulous wealth, and they and their families face almost no personal risk unless they choose it.
And this explains the military actions, war is always good for the economy!
~Would love to see riots in the streets, Putin and Russian army troopers running around screaming in flames after being hit by civilian-tossed Molotov cocktails~
What powers do you think would replace Putin?
I guess Obama had to ask the same question regarding Lybia, Egypt and then Syria a Ukraine before starting all of these.