Вы находитесь на странице: 1из 75





Group no: 9
Taher Zoher Ali : 52
Anirudh Patwari : 53
Honey Desai : 54
Harkaran Atwal : 55
Nirvi Ashar : 56
cussia: key information
‡ Territory: 17.075.260 sq.m, 65% of it belongs to permafrost

‡ Overall quantity of cities, towns, villages etc. - 157.895 (nearly 20% of

them don¶t have telecommunications)

‡ Population: 132.000.000 people, 81% of which live in cities and big

towns. Nearly 10% of the population leave in Moscow.

‡ 61% of population are pensioners.

‡ 81% of population either don¶t work or work in the budget sphere, so

less than 20% of population provide state budget with income.

‡ Average income per person - $ 250

GDP of cussia


_  _

cussian GDP statistics, %
4   4 
c A is mainly dependent on
following factors for its GDP

‡ GDP - composition by sector:

agriculture: 4.7%
industry: 34.8%
services: 60.5% (2009 est.)

‡ Oil - production:
9.932 million bbl/day (2009 est.)
country comparison to the world: 1

‡ Oil - exports:
4.93 million bbl/day (2009 est.)
country comparison to the world: 2

‡ Public debt:
6.3% of GDP (2009 est.)
country comparison to the world: 122
6.2% of GDP (2008 est.)
áost economies in the Europe and Central Asia
contracted in 2009(real GDP growth, %)
áost recent output data for the third quarter suggest that domestic demand
is beginning to replace external demand as the main growth engine.
‡ Growth in Russia in 2010 will be predominantly
driven by a modest growth in consumption and the
base effect, reflecting a low base of the first two
quarters of 2009 (figures 2.3 and 2.4).
GDP and inflation forecast for

‡ GDP $ 1 608,6 billion

‡ inflation - 8,5%


‡ GDP ± $ 1 848,3 billion

‡ nflation ± 7%


‡ GDP - $ 2112,8 billion

‡ nflation ± 6,8%
Russian Inflation History Post
Soviet Russia

‡ Year after the economic reform of oviet

cussia prices rose an astounding 2,520%
‡ over the next year cussia managed to
lower inflation rate down to 840% and
down to 224 percent by 1994.
‡ This is due to them lowering monthly
inflation rates down to 21% by early 1994
‡ variations were being caused by the
instability in cussia's monetary policy
Russian Inflation After the year

‡ cussia's inflation rate would slowly start to

decline steadily in 2000 from 20% to
around 11% by year end 2006.
‡ . cussian inflation rate was expected to
reach 12.1% by the end of 2007
‡ cussian inflation accelerated in January
2008 as oil and gas prices surged causing
consumer demand to rise
‡ cussian inflation rate remained frozen at
15.1% the highest it had been in more
than 5 years.
„actors for rise in Inflation
‡ ncrease in income from rising global
energy prices boosted domestic demand.
‡ government spending on items like
pensions and state wages in the runup to
last December's elections
‡ surge in consumer spending and
construction activity
‡ Policy limitations at the level of fiscal
demand management
Overheating A Problem
‡ nflation has almost doubled over the past
year and now extends well beyond food
and energy price increases
‡ Domestic demand is increasing at an
annual rate of 15 percent in real terms,
while GDP is growing at 8 percent
‡ cesource constraints have now become
strikingly evident in labor markets, where
shortages are causing real wage
increases of about 16 percent annually
K  !c 
Vxchange cate
‡ Vxchange rates are determined by the demand and
the supply of currencies in the foreign exchange
opportunities Global trading

celative interest Changes in relative

rates inflation rates

The demand for Currencies Balance of

mport & exports of payments(BOP) =
goods and services Determinants (X ± M) + (C ± CO)
+ (F ± FO) + FXB
Appreciation & Depreciation
When the cussian currency (cuble)
appreciates then the exports will become
expensive and imports become cheaper so
balance of payments will get worse and on
the other hand the russian currency (ruble) is
depreciated then russia¶s exports will be
cheaper and imports will be expensive , so
balance of payments should improve.
The national currency of the cussian Federation (cF) is the ruble.

1st Jan 1st Jan 1st Jan 1st Jan Novembe

Country/Year 2007 2008 2009 2010 r (Recent)

INDIA (RS) 0.59 0.62 0.60 0.64 0.69

CHINA(yen) 3.37 3.36 4.31 4.42 4.61

BRAZIL(real) 12.29 13.93 12.30 17.15 18.35

US($) 26.33 24.55 29.39 30.18 30.80

UK(Pound) 51.92 48.45 42.70 48.82 49.42

n the year 2008 ± 2009 the cussian economy was hit by major financial
crisis in cussia's long-term economic growth same as 1990 crisis
 Oil prices dropped from $140 per barrel to $40 per barrel.
 The reversal of capital flows from $80 billion of in-flows to $130 billion of
out-flows have all served to crush fledging cussian economic growth.
cussia was greatly dependent on oil prices
can be proved from the diagram as During
the boom that preceded the crisis, the
importance of oil and gas was to some extent
on every sector in the economy, not just to oil
and gas and related industries that supplied
inputs but also sectors such as retail trade,
real estate, telecommunications, and others
saw their sales, profits, and share prices rise
sharply and now it is hard to ignore that after
the crisis of 1990 the sectors were still
dependent on oil and gas prices.
The belief that high oil prices would persist, combined with low interest
rates abroad, made foreign borrowing attractive. Over time, however, the
process led to an overextension of lending and to a deterioration of the
collateral that was held. The system became more vulnerable to sudden
stops of capital inflows which affected the balance of payments and this led
to the weakening (depreciation) of currency as compared to other
Measures by cussia
cussia needed to move away from its
dependence on oil and gas because its
economy performed so poorly in 2009. the
most instructive comparison is to compare
cussia¶s performance to that of the other so-
called BcC countries (Brazil, cussia, ndia,
and china).. t is apparent that while cussia
may have suffered most dramatically from
the global financial crisis, it also grew much
faster than the other BcC¶s prior to that.
Current Currency regulations of
‡ Payments between residents can only be made in rubles except resident may
borrow from and repay cussian banks in a foreign currency.

‡ While the ruble's exchange rates with foreign currencies are freeAfloating, it
is not yet a fully convertible currency.

‡ NonAresidents have the right to open and operate both foreign currency and
ruble bank accounts in an authorized bank.

‡ NonAresidents are permitted to make payments between themselves in a

foreign currency without restriction.

‡ cesidents and nonAresidents may import foreign currency into cussia

without restriction.

‡ evere administrative fines apply for the breach of currency control rules,
ranging from 75% to 100% of the amount of the relevant operations.
cussian Fiscal policies and deficit

‡ mhe fiscal outcome for 2010 is likely to be better than

expected as a result of favorable oil prices.
‡ the Federal budget was executed with a deficit of only
2.2 percent of GDP, down from 4.0 percent of GDP in the
same period in 2009 and a budgeted deficit level of 5.4
percent of GDP for 2010
‡ This is mainly due to higher revenues from oil: in Jan-
ep of 2010 revenues amounted to 18.3 percent of GDP,
up from the budgeted 17.3 percent for 2010.
‡ mhe Government is now planning a gradual fiscal
adjustment to eliminate the federal deficit by2015.
mhe federal budget deficit is planned to be financed mainly from domestic
borrowing supplemented by a modest amount of external borrowing.
‡ Reliance on domestic financing of the deficit
presents at least two sets of challenges
‡ First, although there is enough liquidity in the
domestic market to finance an overall fiscal
deficit below3 percent of GDP
‡ econd, the fiscal adjustment on the
expenditure side could become slower and the
deficit higher in the election cycle in 2011-12
Need to rethink fiscal
As in other
The pace of expenditure
fiscal adjustment pressures may
in the 2011-13 increase in the
uncertainty and
budgets is election cycle
downside risks in
slower than 2011-12 leading
the oil market
initially to further
envisaged weakening of
K "
Unemployment in Russia
Recovery and a Seasonal
increase in employment
‡ nemployment fell from January to June
2010 and has since remained broadly stable.
‡ nemployment in cussia fell from 9.2 percent
in January 2010 to 6.6 percent (5.0 million
people) in eptember
‡ but it is likely to increase with the onset of the
winter and remain high in 2011
‡ many long-term unemployed dropped out of
the labor force. o, cussia¶s labor market
conditions remain difficult
Unemployment Rate
‡ Official unemployment climbed a full
percentage point in cussia during the month
of January and now stands at 9.2 percent
‡ . Despite government claims that the
recession is over, the state statistics agency
cosstat reported that a further 630,000
people lost their jobs last month
‡ The emergence of mass unemployment in
cussia is reflected in a ratio of jobless people
to vacancies of 24:1. At the same time last
year, this ratio stood at 16:1.
‡ m 
$ %
±  & &

& &
  & &

'& &($&)
±  &
$*  $

& &
' & 
' &
± , $

& &
& ' &  -"

‡ &
 $ &$"-& 
*  /$ &
&  0
/0 $.
" #  $ % &'
‡ m  "-  /$
* 1/  " 
 &2-& -

 /  . .
m & 0.3   
$ &&& & & &
‡  "& 
& $&
& &  &
 ' $ $
1' $ &(- &2/ /
 & -
 & .   " 
' $ $
-&   &   4 .
' $ $
‡ 5" 
& &
'&"$&" ' $ $

" &%  
/0$$" &
 & -
 &"$0 $ 
'& /0 


& $&
 & &  

 $$" & &
 $+) ,  

‡ Modernizing labour and employment legislation.

‡ Organizing the labour market monitoring
‡ Vnsuring the balance between vocational
training and demand for workforce.
‡ Facilitating the increase of workforce
geographic mobility.
‡ Optimizing the influx of labour migrants.
‡ timulating the population¶s economic activity.
‡ mproving the quality of jobs.
K   # !

‡ cussian Trading ystem

‡ Vstablished in 1995 in Moscow
Technical analysis.

‡ cesistance level: - 1695-1705

Fundamental analysis.

‡ cussian stock exchange is effectively

‡ Complete dependent on Oil prices.
‡ The cussian stock market has been either in the top five
performing markets in the world or the bottom five in
every year except one.
‡ Oil prices have already started rising and if the trend
continues then cussian market can provide a good
investment opportunity.
K  c c 
Russia Interest Rate

‡ n cussia, interest rate decisions are taken by the

Central Bank of the cussian Federation.
nterest cate (in past three
 ,- 6   6  " " "  7$& 8' 9$

_ .  . . ._ . .  .  .  .  .  . 

 _. _. _. _.  _. __.  __. _. _. .  . .

 _. _._ _. _. _. _. _. __. __. __. __. _.
‡ ceduction in main interest rates for the 14th time to
bolster the country¶s economic recovery.
‡ nterest rates have been continuously falling. t¶s a
positive sign for the country as the govt. is focusing more
on growth and providing the people with an opportunity
to get cheap finance.
‡ Gross domestic product rose an annual 2.9 percent in
the first quarter, less than forecast by analysts in a
Bloomberg survey, after contracting 3.8 percent in the
last three months of 2009. The recovery remains weak
and inflation is low, so there is a fundamental case for
further easing.
‡ Lending grew 0.9 percent last month with corporate and
retail loans showing gains, the first time both rose since
January 2009.
‡ Banks view lending to the real sector as being quite risky
and prefer to purchase securities and build up liquidity.
Further cuts have the potential to spur lending. The
demand for loans in the real sector is still weak.
‡ The recovery remains weak and inflation is low, so there
is a fundamental case for further easing.
‡ The recovery remains weak and inflation is low, so there
is a fundamental case for further easing.
K    c$
Facts About cussia

‡ m 

‡ m    

‡ m      

‡ m      

Let¶s visit some important
cities in cussia.
cussia is famous for«

‡ m ! !
‡ m
‡ !"
‡ # $  
‡ !
‡ % 

#  -. .- . ( 

+_ %_.31 _:  

_+ % _.31 :  
  '%_. 31  :  
_ _ 21&.2

&& %. 
 1 2  %. 
 %_. 1&.2

;" &
 /&  &132 +. 31&.2

 .3m & .3 0

3=  0

$"132 _.3 "'  _._3& " $

$ "2

7& >_+36"

 132 &%&
 &   $&
 " &
    + $&
'   +
'  $ '' $  '

? " 132 !"


& " 
Russia: Resources

‡ cussia has a rich resource base. One of the

most important mineral producing countries
with widely scattered deposits.
‡ cussia leads the world in the production of
natural gas and lead.
‡ cussia also leads the world in iron ore
reserves and natural gas reserves. cussia is
second in the production of platinum,
tungsten, aluminium and vanadium.
Political structure of Russia
‡ The years under Boris Yeltsin (1991±1999), were characterized by
the reorganization of governmental structures and functions, with
conflict over the balance of power between the president and the
parliament, and between central and regional powers
‡ . A constitution approved by referendum in 1993 provided for a
democratic federation with executive, legislative, and judicial
‡ Vladimir Putin, replaced the governors with centrally appointed
members, giving the president greater control over that house
‡ Putin also changed the electoral and party system to remold the
structure and power of the Duma.
‡ The state has always been prone to authoritarian rule with
censorship and strong government control over the media;
oppression of political opposition, partly through the secret police;
bureaucratic centralization; and legislation by decree
Education evolution in Russia

‡ Academic standards remain high, and students are

well trained in world history, foreign languages, music,
mathematics, and science
‡ n oviet times, the values of internationalism were
stressed, and the oviet nion's role in modeling a
multiethnic nation was highlighted
‡ oviet nion had a world-class system of higher
education, with forty universities and hundreds of
institutions specializing in academic, scientific,
professional, and technical disciplines
‡ Business education, especially in management,
finance, and marketing, has been developed only
since 1991

‡ Ninety-nine percent of the adult population

is literate, although literacy and completion
rates are declining among educationally
disadvantaged ethnic groups in the North
Caucasus, southern iberia, and the Far
‡ Higher education has come to be valued
as a mark of social prestige and is
regarded as critically important for
economic success.
‡ The debt crisis in Western Vurope has sharpened downside
risks to global recovery and oil prices.
‡ But the impact on cussia is likely to be limited because of
cussia¶s better fiscal and debt positions and limited trade and
financial linkages with the affected countries
‡ cussia is likely to grow by 4.5 percent in 2010, followed by 4.8
percent in 2011 as domestic demand expands in line with
gradual improvements in the labor and credit markets
‡ Vmployment situation is expected to improve only gradually
with attendant reductions in poverty.
‡ Preliminary updates to the World Bank¶s
forecast suggest global GDP growth of
about 3.5percent this year, slowing to 3.2
percent in 2011 before recovering to
around 3.6 percent in 2012
‡ An increase in risk premia would likely
affect cussian corporations with large
external debts. The maturing debt in 2010
is equal to D 114.5 billion (about 7
percent of GDP), with D 35.6 billion in
the financial sector.
mhe ongoing debt crisis in high-income Europe poses a new challenge
for the global recovery ,while direct impact of the crisis on Russia is
likely to be limited, this is predicated on the assumption that the Euro
zone will avoid large-scale debt default and restructuring and broader
‡ Private sector involvement is crucial to address the vast
investment needs and brings significant value to the public sector.

‡ it provides new sources of funding, encourages entrepreneurial

initiative, increases efficiencies and introduces new management
practices and know-how.

‡ cussian infrastructure projects cannot take foreign currency risk.

Therefore, the availability of long-term rouble funding must be a

‡ An increase of financial services FD in cussia has been identified

as an important trend for the continued modernization of the
financial services industry as well as providing much needed
capital for a decaying infrastructure and a multitude of other
capital projects.


‡ Under the regime of Vladimir Putin
Russia has progressed gradually and at
a decent rate with average gdp growth
of around 6 %
‡ mhe main advantage of Russia is that
more than 50% of GDP comes from
production of Oil and it is 2nd largest
exporter of Oil after Saudi Arabia
‡ with globalization the demand for Oil
will keep on increasing and it being a
scarce commodity the prices will keep
on rising as demand with be more than


‡ Inflation has come down drastically
from 15% in áay 2008 to 5% in June
2010. mhe government is taking lot of
measures to curb inflation by limiting
the money supply and practicing credit
‡ But increasing wages and pension
funds could be counterproductive
‡ mhe belief that high oil prices would
persist, combined with low interest
rates abroad, made foreign borrowing


‡ mhe system became more vulnerable to
sudden stops of capital inflows which
affected the balance of payments and
this led to the weakening (depreciation)
of currency as compared to other
‡ WRm to stock markets since its
inception after the collapse of the
Soviet Union, the Russian stock market
has been either in the top five
performing markets in the world or the
bottom five in every year.


‡ So it mainly fluctuates with the price of
its precious commodity Oil and goes up
and down as per changes in the crude
prices so it¶s a very volatile market.
‡ So investors need to be careful in
investing in Russian stock market
because risky investors can make lot of
money but long term investors might
not find value in this volatile market.


‡ Russiaµs fiscal and debt outlook is much
less pressing than in other countries
because both fiscal deficits and debt-to-
GDP ratios are much lower
‡ Russiaµs trade with the main affected
European countries is relatively small,
making the potential impact through this
channel limited.
‡ mhe possible contagion and the broader
debt crisis in Europe, however, could
transmit new shocks to Russia through
two key channels: oil prices and
financial/capital flows.
‡ Petrostate: Putin, Power, and the New cussia
‡ cussia's economic reform muddle by Abram Bergson
‡ https://www.cia.gov/library/publications/the-world.../rs.html
‡ www.tradingeconomics.com/Vconomics/GDP-Growth.aspx
‡ www.balticdata.info/russia/.../russia_macro_economics_russia_GNP_GDP_ summary.htm
‡ www.worldwide-tax.com/russia/rus_inflation.asp
‡ www.einnews.com/russia/newsfeed-russia-inflation
‡ www.businessweek.com/.../russia-drought-may-lift-inflation-state-economy- role.html
‡ www.esri.go.jp/en/tie/russia/russia4-e.pdf
‡ www.corporateinformation.com/Currency-Vxchange-cates.aspx
‡ www.exchange-rates.org/currentcates/V/c B
‡ www.gwu.edu/~ieresgwu/assets/docs/ponars/pm_0090.pdf
‡ www.opendemocracy.net/...russia/.../russian-unemployment-massaging-stats
‡ www.business-standard.com/.../russia%5Cs-unemployment.../on
‡ http://seekingalpha.com/article/84286-russian-inflation-is-the-boom-about-to-bust
‡ http://www.russiansabroad.com/russian_history_196.html
‡ http://russiatooat.blogspot.com/2008/02/russian-inflation-january-2008.html
‡ http://www.marketwatch.com/news/story/russian-inflation-rate-continues-