The economic situation in the beginning of 2016 didn’t kick start to country’s development and still doesn’t encourage optimism. Giant scale volatility in world market oil prices, the ruble-dollar rates and stock markets showed the groundlessness of 2016 forecasts and made the involved organizations (The Ministry of Economic Development, the Central Bank of Russia, the Ministry of Finance) foresee the possible development of the Russian economy taking into account USD 40, 30, 20 per barrel of oil. In the Table 1 the macroeconomic indicators are represented according to Rosstat (the Federal State Statistics Service) following the results of 2016.
| January 2016 | In % to | For reference | |||
|---|---|---|---|---|---|
| January 2015 | December 2015 | January2015 in % to | |||
| Jan. 2014 | Dec. 2014 | ||||
| Gross domestic product, billion RUB | 80412,51) | 96,32) | 100,73) | ||
| Industrial production index4),5) | 97,3 | 80,3 | 100,9 | 78,8 | |
| Agricultural production, billionRUB | 159,0 | 102,5 | 58,5 | 102,8 | 59,1 |
| Freight turnover, млрд т-км | 428,3 | 100,9 | 93,3 | 96,1 | 95,8 |
| Retail turnover, billionRUB | 2125,1 | 92,7 | 73,6 | 96,4 | 67,3 |
| Volume of charged services to citizens, billion RUB | 641,1 | 97,3 | 87,9 | 100,66) | 88,16) |
| External turnover, billion USD | 45,97) | 72,98) | 109,39) | 76,78) | 105,09) |
| including: export of goods | 28,4 | 74,0 | 111,3 | 77,5 | 104,4 |
| import of goods | 17,4 | 71,2 | 106,2 | 75,4 | 106,0 |
| Investments in equity, billion RUB | 14555,910) | 91,62) | 98,53) | ||
| Consumer price index | 109,8 | 101,0 | 115,0 | 103,9 | |
| Industrial goods manufacturers price index4) | 107,5 | 98,8 | 107,0 | 101,3 | |
| Total number of the unemployed, million people | 4,4 | 106,2 | 100,1 | 97,96) | 103,06) |
| Number of legally registered unemployed, million people | 1,0 | 110,1 | 101,6 | 97,36) | 102,66) |
Under current conditions country’s leadership arrived at the conclusion on necessity of ordinary crisis bailout plan development, though in the end of 2015 the absence of grounds for it had been underlined. The crisis bailout plan has been gelled on the results of multiple discussions, modifications and search for required monetary means on its implementation. It consists of 2 parts: the first one includes urgent or prompt measures, the second – strategic measures focused on mid-term result.
The prompt measures come down to support of regions and industries, among which:
- provision of financial assistance to the regions on budget deficiency payments, unemployment payments; to monotowns – on training of executives modern ways of project management and creation of comfort urban environment;
- standardization of financial sector, capitalization support of Vnesheconombank, saving of state credit guarantees, granting of subsidies for recovery of several modernization expenses.
Special focus will be on potentially prospective industries such as car industry, residential building, transport engineering, light industry, agribusiness, in particular:
- in the car industry – prolongation of vehicle scrappage program, soft auto lending, leasing; subsidization of investments loan payments; increase of automobile export; renovation of ambulance car fleet;
- in the construction industry – continuation of support program on mortgage housing credit, subsidization of mortgage interest rates; provision of assistance to mortgage borrowers got into challenging financial situation;
- in the transport engineering – three blocks of measures will be implemented: measures aimed at accelerated depreciation of life-expired carriages and renovation of freight rolling stock fleet; measures aimed at rolling stock operation safety; measures aimed at support of innovative carriage manufacturers;
- in the light industry – implementation of financial support measures focused on provision of financial resources accessibility and stimulation of demand on the light industry goods;
- in the agriculture – accumulation of existing programs financing, extension of privileges on domestic machinery purchase, support of small business patterns.
Mid-term measures include the following:
- small business support measures, in particular: increase of simplified tax system threshold to 120 million RUB; prolongation of UTII (Unified Tax on Imputed Income) after 2018; alignment to the unified property tax deduction to the extent of 500 square meters for enterprises using special modes; favorable conditions for the rent of government property; easing of several environmental payments;
- limitation and arrangement of inspections, improvement of investment climate, guarantees on participation in state procurement, credit provision assistance, easing of entrance to the market;
- performance of audit procedures for expenses of infrastructural monopolies, government companies, inspection of regulatory legal acts on economic activity;
- continuation of cost reduction activity, encouragement of non-resource export, development of advanced technologies;
- own-account citizens will get an opportunity to file a voluntary report on implementation of sole proprietorship to tax authorities;
The 2016 crisis bailout plan differs from the 2015 plan for commitment to support of economic sector having potential for development, not the banking sector. The plan is meant as well for the structural reforms, the goal of which is to get benefit from financial contributions in the mid-term prospects. The implementation of underlying measures will make it possible to overcome the negative trends in the economy and to diversify the economy in Russia.
Table references:
1) 2015 figures (first valuation).
2) 2015 in % to 2014.
3) 2014 in % to 2013.
4) By the following types of activity: "Extraction of minerals", "Processing operations", "Production and distribution of electricity, gas and water".
5) Considering adjustment for off-the-books economy.
6) The indicators are calculated without reference to the Republic of Crimea and Sevastopol
7) Figures for December 2015.
8) December 2015 and December 2014 in % to the corresponding period of the previous year, in de facto prices.
9) December 2015 and December 2014 in % to the previous month, in de facto prices.
10) Figures for January-December 2015.
Dear Madams and Sirs,
Information agency Credinform congratulates fair ladies with the spring holiday – the 8th of March! This day is strongly associated with traditional symbol of beauty and renewal – a bunch of fresh flowers.
It is not a secret that flowers in the Russian stores are mainly imported from abroad. Lack of agro-climatic resources and greenhouse facilities are the reasons of non-possibility to satisfy the whole demand during the year. Deficit of domestic plants is especially noticeable in winter and early spring, when there is a peak demand for flowers due to the International Women's Day.
Devaluation of the ruble against main foreign currencies has made significant adjustments in the flowers market both in monetary and volume terms (see picture 1). Following the results of 2015, 72,3 th tons of flowers were imported, that is by 8,4% less than in 2014 with its 78,9 th tons. Speaking about monetary import volume, the reduction by 19,5% is very much significant (492,7 mln USD in 2015 and 612,7 mln USD in 2014).
Picture 1. Dynamics of fresh cut flowers import in volume and monetary terms, th tons, mln USDGeography of fresh flowers supplies was also changed (see picture 2): the Netherlands being until recently the undisputed leader, gave way to the Latin American Ecuador, which has taken 37% of the market in volume terms in 2015. The relative ease of switching the logistic flows to South America can be explained by the fact, that Ecuador is our country’s long-standing banana supplier. Moreover, good relations between the two countries promoted to abolition of additional administrative and customs barriers for trade.
As a reference: flower products are procured in 69 countries, including the exotic Tanzania, Ghana, Surinam, Malawi, Mali etc.
Picture 2. Main importers of fresh cut flowers to the RF, % of total deliveries in volume terms, 201546,7% of the market belong to roses, the most popular flower in Russia. Then follow golden daisies with 22%, pinks with 8,7% and lilies with 2,1%. The lowest demand is for orchids and gladioluses – 06,% and 0,1% respectively (see picture 3).
Picture 3. Structure of the Russian market of fresh cut flowers, % of total deliveries in volume terms, 2015Following the statistical data, the highest prices on flowers fall to the end of February – early March. That is absolutely predictable seasonal event due to the highest demand. However, inflation pressure observed in 2015 will probably remain in 2016, because of the ruble devaluation and import prices rise as a result (see picture 4).
Today one fresh cut flower in Saint-Petersburg costs 100 RUB in average, and 78 RUB in Moscow. The rise in price for a year amounted by 15-30%.
Picture 4. Average market prices on fresh cut flowers in Saint-Petersburg and Moscow, RUB per pce.Import reduction and rise in prices give a great opportunity to domestic agricultural companies and farming enterprises to occupy the vacant niche and increase the scale of flowers cultivation in a sheltered ground (greenhouses) within the country.
Despite all the difficulties, there is no doubt that the coming holiday will be filled with the fragrance of flowers, warm words and special atmosphere.
In conclusion of our Newsletter, the Information agency Credinform again congratulates beautiful women with a holiday of the 8th March and wishes you all health, happiness and spring mood!