Comments

As the Gaidar Forum has shown, there are no illusions about the current economic situation either with the expert community or the government and that is a positive signal.

On 20 January, Brent oil prices (March futures) fell to $27.8 a barrel, the level which was observed last time 12 years ago. If it is compared to February 2012, prices on oil depreciated nearly 4 times over.

Russia’s budget must be adapted to the current economic situation, otherwise a spontaneous “fine-tuning” may hit the population through high inflation, as was the case during the crisis in 1998–1999, assumed Russia’s Finance Minister Anton Siluanov at the 7th Gaidar Forum.

An expert discussion – “Islamic Finance: Problems in the Formation of the Industry” – was held at a Guidar Forum. The topic has proved relevant because it was discussed for two consecutive years.

In 2015, the Bank of Russia encountered a series of global challenges while pursuing the targets of its monetary policy. The economic situation in 2015 was characterized by the following features: Russian and Western bilateral sanctions were maintained, the prices of Russia’s basic export commodities kept falling, economic agents’ expectations for inflation remained high.

The WTO's 10th Ministerial Conference was held in Nairobi, Kenya, from 15 to 19 December 2015 culminated in committing to eliminate subsidies for agricultural exports.

On 15 December, the text of Federal Law of 14 December 2015, No 359-FZ 'On the Federal Budget for 2016' was posted to the Official Governmental Internet Portal of legal information. One day earlier, the RF Ministry of Finance published 'The Budget for the Citizens', an explanatory attachment to the Federal Law 'On the Federal Budget for 2016'.

After its two-day meeting, the US Federal Reserve released, on 16 December, its long-awaited decision that the key interest rate would be increased by 0.25 pp. – to 0.25–0.5% per annum.

Last week, the Bank of Russia issued a revised forecast of Russia’s economic development in 2016-2018, which takes into account the risks that emerged in Q4 2015.

At the Bank of Russia Board of Directors' meeting last Friday, it was decided that the key interest rate should be kept unchanged. The key interest rate is to stay at 11% until the Bank of Russia Board of Directors' meeting scheduled for 29 January 2015.

This week, the Central Bank of Russia has declared its cash emission plans till the end of this year. According to the estimate announced by G.I. Luntovsky, First Deputy Chairman of the Central Bank of Russia, the volume of cash funds is to increase by Rb 1 trillion before the end of the current year. Is that much or little?

On 13 November 2015, the State Duma will consider in the first reading the draft federal budget which is being formed in quite complicated economic conditions for Russia – the economic crisis, sanctions and depreciation of prices on energy commodities– which affect formation of the revenue side of the budget.

On 30 October 2015, the Central Bank of Russia made a decision to leave unchanged both the key rate and rates on its operations related to provision and absorption of liquidity.

On 23 October 2015, the Government of the Russian Federation introduced a draft law on the 2016 Budget to the State Duma. The budget was drawn proceeding fr om the forecast of the oil price being equal to $50 a barrel and the rate of inflation and GDP growth amounting to 6.3% and 1.2%, respectively.

On 5 October 2015, negotiations were over on establishment of the Trans-Pacific Trade Partnership (TTP) which numbers 12 states of the Pacific Region, including the world’s largest economies, such as the US, Canada, Japan and Australia.

Data released by Rosstat related to industrial statistics (for August) demonstrate a return of stagnation to negative trend – industrial output in the Russian Federation in January-August down 3.2%, and in August down 4.3% in annual terms. At the same time, compared to July 2015, industrial growth amounted to 0.2%.