2017 took place in Russia under the motto “the crisis is over.” Yes, such statements are pouring in from officials already in 2015, but they are so used to, it seems, and nobody paid attention. While the President himself in June during a “straight line” is not stated that the crisis is over. This statement was then sounded, maybe a little fast, but based on what is clear: oil rose in price, the ruble kept inflation rushed to its target of 4%. And most importantly — the manufacturing industry has finally come out, showing the growth of 5.7% compared to may 2016 and June 2017, added 2.9 percent by June 2016.
But, as it usually happens, something went wrong. In July, the manufacturing industry turned negative, down by 0.8% compared to July. The mining industry continued to remain in positive territory, showing from April to June, a growth of 4% to 5%, but what of that? We already stuffed enough cones since the Soviet times and know exactly what commodity dependence is not a solution to the crisis. Enjoying the success of oil and gas, and exposing them for show, we only dig a deeper hole for themselves. So, first of all, attention should be given exactly the manufacturing industry. Gets everything is not the one who produces cheap raw materials, and those who make this raw material expensive goods.
In the spring of Industrialists happy strengthened the ruble, and rapidly increased imports of intermediate goods, which missed the import substitution-that never worked. The presence of semi-finished products and spurred production in may-June. But the population is not so easy to spend sweet words. People see what they have in the wallets and how realistic is the prospect of increasing income in the near future. So, an encouraging prospect before them would not open, and no one ran to the store a joy to spend money. Summer retail sales consistently lagged behind at 4% to 5% from last year’s values. A result, production rose, and consumption fell. The glut in the market has demanded that manufacturers take immediate steps: there was nothing left to do but to cut production. And so began the rollback of all achieved “breakthrough” performance.
Besides, when generating excessive optimism did not take into account that the revenue of the enterprises has not increased with the growth of costs. In the end, the processing enterprises for the first 9 months of 2017 earned 10.1% less than in the same period last year. The situation is similar with agriculture. Record crop along with the inability to recycle the products, or at least leave it for long-term storage has led to the fact that farmers this year earned 9.9% less than in the past.
But the Russians began to actively use your “6 acres.” According Ranepa, every third consumes the products produced at the farm. A similar picture we saw in the 90s that scare us so on television, explaining that this is — the main evil from which we are protected by the government. These are the successes of agriculture. Thanks to Alexander Tkachev, taught people to work on the ground, and not any new-fangled nonsense.
But the oil and gas industry is no problem, over the same period of time they earned a 38.8% more despite the fact that oil has risen only 27%. For them you can be happy, but several oil and gas companies will not get far. Builders, for example, earned 66,4% less than last year. Negative conditions in the Finance companies has led to mass bankruptcies. Especially III-rd quarter of the year clearly “made”: the number of bankruptcies increased by 3% compared to the second quarter, and as much as 12.4% compared to the III-th quarter of 2016. September surpassed the peak of March 2015 and a little bit not reached to a historic high set in October 2009.
And the end is not yet: in November, the industry has shown a record for 8 years drop: -3,6% compared to November 2016. It is not in the limits of oil production. The mining industry lost only 1%, and manufacturing fell from 4.7%. The provision of gas and electricity is lost 6.4 percent, water supply, sanitation and waste removal decreased by 5.7%. Enterprises just stand up, this was not even in 2015. Faster, higher, stronger drive their economy into the coffin.
And what about our government that it is trying to do to fix the situation? Diligently trying not to make a mistake. That is nothing to do. In may, the Ministry of economic development was to provide innovative, tailor-made programme for accelerating the economy, but it is not. The center for strategic research Kudrin was also tasked to develop a strategy by may, but the result is the same. During the year the Ministry of economic development did not actually have done anything that could make life easier for entrepreneurs. Sounded just stating what we need to ensure that all was well. And recently, Maxim Oreshkin, and all took responsibility from his Department for economic development, saying that economic growth people need to work more and to invest more. The task of the Mayor, in his opinion, lies in the provision of stable macroeconomic indicators. Now the law of the jungle.
In General, if all this is to summarize the results of the 2017 do not look very rosy: growth of 1.6% in the first three quarters is provided only risen in price oil, the profit of enterprises is reduced, many even close and real disposable income and do not think to break my fall (from January to October, they decreased by 1.3% compared to the ten months of 2016).
So what to expect in the next one, 2018? Is there any hope that the upcoming year will be a turning point, in any case, though, because a new presidential term is often associated with change and decisive action?
After the election, theoretically, possible changes in the Cabinet, and change of domestic policy, including economic. Six years ago, for example, came the famous decrees of may. Now here’s the hope for the adoption of a full strategy for socio-economic development and related programs. Most importantly, the strategy and programs had clear goals, specific deadlines and responsible persons. Otherwise it will as with the “Strategy-2020”: like adopted, but no one to implement it had no case.
Given the massive propensity of our government to report on how great it is that we have low inflation (2.3% in annual terms in December 11), rising in nominal wages (that’s just who actually are interested in these figures on paper?) and rising GDP, should be afraid of them lying down on the stove in the expectation that everything will resolve itself — the main report of beautiful mold, with the desired digits. In this case waiting for us, Russian citizens? Nothing good. Even the expiring 2017 seems quite a plump.
If the principle of work of the Cabinet in the economic sphere will remain the same, profits will shrink even more due to the growth of the financial burden: in 2018 will be increased excise taxes on cars and fuel are going to introduce new recycling fees will be a tax on personal property. There can be no growth of staff salaries. And that means that demand for goods will remain at the same level. Buy people just.
With the export of goods next year the situation should be at least no worse: new rules of Finance for the purchase of foreign currency on oil revenues will put pressure on the ruble, and it should be cheaper. If oil quotations nothing extraordinary happens, the ruble might “get better” 10% – 15% in the first quarter of 2018. For people it is unpleasant, but good for exporters. So our products become more competitive on the world market.
Oil is now. Our all. Here, it seems that significant changes can be expected, and a barrel of black gold will cost about 50 to 60 dollars, that is cheaper than it is now. Coupled with restrictions on the volume of oil production of the reasons for the growth of the mining industry there.
So again, the proverbial “bottom” and no chance of light at the end of the tunnel? Actually there is. The situation may be reversed the easing of monetary policy of the Central Bank. Affordable loans is a proven way to push the economy. And record low inflation. But while statements of the financial regulator’m just saying that in the best case, the key rate will drop in 2018, only 1% to 6.75%. Even when increased to 4% inflation is too much for a developing economy.
The reduction of the key rate should not result in yet another cycle of money in the interests of the Federal budget. It is necessary to carry out reforms to reduce the financial burden on entrepreneurs. High taxes and numerous non-tax fees do not allow enterprises to develop, to reinvest the profit (getting less) and to attract investors. What is the meaning of foreign businessmen to open a business in an unpredictable Russia, if the most likely prospect to stay lookin like a sticky?
And, of course, emphasis should be placed on increasing the autonomy of regions. They cannot forever nursing grants and subsidies, they’ve risen to to dispose of, if not all, then at least for the most part of their income, develop business environment and compete with each other.
Hope for the improvement of human welfare in the next year there, but the government really needs to put a lot of effort, starting with changing priorities and the principle of “if you do nothing, then nothing spoil”. Time neat point edits are passed now requires bold and decisive action that will give the economy a chance for a real solution to the crisis, and to a decent standard of living.
However, with the current political system it is almost impossible. The government has embarked on a quiet, peaceful stagnation in a swamp, killing any competition in decision-making and choice of economic policies. Only competition in politics, competition parties, competition, economic models, competition in the elections may provide some offset. While elections are held with the crowd of incompetent old men and clowns, to expect radical change is pointless and naive.
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