Thursday, November 27, 2014
 
Follow sptimesonline on Facebook Follow sptimesonline on Twitter Follow sptimesonline on RSS Download APP
MOST READ



PARTNER NEWS



BLOGS



OPINION



WHERE TO GO?

19th Century Portraits

History of St. Petersburg Museum: Rumyantsev Mansion

 

  Print this article Print this article

Russias Top Economist Needs to Face Reality

Published: October 24, 2008 (Issue # 1419)


On Friday, the government reported that growth in gross domestic product for September slowed to 0.4 percent. On Monday, however, Prime Minister Vladimir Putin claimed that Russia, Brazil, India and China will remain the locomotive of the world economic growth for the next few years.

On Sept. 3, I wrote in this column, A sudden zero growth would not be surprising, and leaders like Putin are not prepared to face reality. Now zero growth has already been achieved but Putin remains in denial, even though as prime minister he is the chief economist in the country.

In fact, Russia will be lucky if it faces nothing worse than stagnation. A substantial decline in GDP next year is an acute possibility. Do not believe all these forecasts that as recently as a month ago predicted 6 percent or 7 percent growth next year. Each forecast is lower than its predecessor. Let us instead discuss the forces at hand.

As elsewhere in the world, the Russian banking system has frozen up because of rising international interest rates and an elimination of trust. Central Bank Chairman Sergei Ignatyev said two weeks ago that he expected 50 to 70 banks to go under. Others fear more than 200 banks might collapse. That would keep the credit market frozen for quite some time and lead to a contraction of loans, regardless of what the Central Bank does.

The second blow has already hit real estate development, a sector that is particularly dependent on credit. Investment is still increasing, but the growth rate has declined to 8 percent from 24 percent during the same month a year ago in September. You can see for yourselves how many cranes are standing still at construction sites in Moscow, and most large real estate and construction companies are considered to be on the verge of bankruptcy. Their stock prices have fallen 82 percent this year. If construction is halved, that alone would reduce GDP next year by nearly 3 percent.

The third strike has hit commodity prices. Since their admittedly brief, sharp peak in July, both steel and oil prices have halved because of the sudden slowdown in the world economy. In addition, energy production is already stagnant, and export volumes are declining. Russias crude oil exports fell by 5.9 percent during the first eight months this year. Steel exports are set to plummet, as China has turned from a steel importer to a major exporter. Domestic demand will decline with construction. Commodities, which represent roughly a quarter of Russias GDP, cannot possibly expand next year. But they may contract somewhat, especially steel production and construction materials.

Pages: [1] [2 ] [3]






 


ALL ABOUT TOWN

Thursday, Nov. 27


The Customs and Transportation Committee for AmCham meets this morning at 9 a.m. in their office on Ulitsa Yakubovicha.


Tickets are still available for local KHL team SKA St. Petersburgs showdown with Siberian club Metallurg Novokuznetsk tonight at 7:30 p.m. in the Ice Palace outside the Prospekt Bolshevikov metro station. Tickets can be purchased on the teams website, at the arena box office or in their merchandise store on Nevsky Prospekt.


Celebrate one of Russian literatures most tragic figures during Blok Days, a two-day celebration of the 134th anniversary of the poets birthday. The tragic tenors work, which led to writer Maxim Gorky to hail him as Russias greatest living poet before his death in 1921, will be recited and meetings and discussions about his contributions to the Silver Age of literature in St. Petersburg will be discussed in the confines of his former residence.



Friday, Nov. 28


Join table game aficionados at the British Book Centers Board Game Evening. Held every Friday at 5 p.m., aficionados and amateurs alike can come take part in a variety of different games that test ones intellect and cunning.



Saturday, Nov. 29


Cats, dogs, birds, rodents and reptiles are just some of the things that will walk and crawl at Lenexpo convention center this weekend as part of Zooshow, a two-day exhibition featuring not only mans best friends but a four-legged fashion show, as well as a food fair that will help pet owners find out more about which kibbles are best for their hungry pets.



Sunday, Nov. 30


Remember the 75th anniversary of the beginning of the Russo-Finnish war in 1939 during todays reenactment titled Winter War: How it Was. More than 200 people will take part in recreating the opening salvoes of the battle for the north in Kamenka, a small village situated between Vyborg and St. Petersburg, using authentic equipment and vintage vehicles from the era. The faux battle begins at 2 p.m.



Monday, Dec. 1


Serbia filmmaker Emir Kusturica is the featured guest this evening at the Lensovet Palace of Culture the Petrograd Side. Fans of the director will get the chance to watch his movie Black Cat, White Cat, as well as ask questions about his award-winning filmography. Tickets for the event, which starts at 7 p.m., start at 2,000 rubles ($42.50).



Tuesday, Dec. 2


Today is the final day of Takoy Festival, a three-week program of plays based on the works of Dostoevsky, Remarque and other famed European writers, whose work is transcribed for theatrical performances. Tonights festival finale is Fathers and Sons, a two-act drama staged by the Novosibirsk Academic Drama Theater based on Turgenevs classic about familial relations.



Times Talk