MOSCOW (Reuters) – As Russia grapples with the impact of plunging energy prices and a contracting economy on its government finances, painful cuts in state spending have become unavoidable.
But rather than touch sizeable defense and social expenditures backed by President Vladimir Putin, the axe is most likely to fall on infrastructure projects that are important for reviving long-term economic growth, analysts say.
MOSCOW (Reuters) – Russia’s economy will eke out growth this year but shrink in 2015 as a slump in oil prices and Western sanctions imposed over Moscow’s role in the Ukraine crisis drag on activity, a Reuters poll showed on Friday.
The poll of 14 analysts predicted that gross domestic product would grow by 0.5 percent this year, a slightly more optimistic prediction than last month’s 0.3 percent forecast, following some recent data which beat expectations.
MOSCOW, Nov 17 (Reuters) – Russian stocks saw a small bounce
on Monday, while the rouble was steady, after the European Union
decided not to impose more sanctions against Russia for now over
Moscow’s actions in Ukraine.
EU foreign ministers agreed to put more Russia-backed
Ukrainian separatists on their sanctions list, but did not
extend measures against Russia itself.
MOSCOW, Nov 15 (Reuters) – Russian state-controlled TV has
broadcast what it called “sensational” photographs, which it
said supported Moscow’s theory that Malaysia Airlines flight
MH17 was shot down by a Ukrainian fighter jet.
Several commentators who have examined the photographs have
described them as forgeries, however.
MOSCOW, Nov 10 (Reuters) – The Russian central bank said on
Monday that it expects zero economic growth in 2015 and only 0.1
percent growth in 2016, in a three-year monetary policy strategy
that anticipates Western sanctions against Russia will remain
until the end of 2017.
The gloomy forecasts underscore the damaging impact that two
major external shocks, falling oil prices and Western financial
sanctions imposed over the Ukraine crisis, are set to have on
the Russian economy in the years to come.
MOSCOW, Nov 5 (Reuters) – Russia’s central bank took a major
step towards floating the rouble on Wednesday by limiting its
daily interventions, accelerating a slide in the Russian
The bank also said it was stepping up foreign currency
financing for banks starved of foreign capital because of
Western sanctions imposed over Russia’s actions in Ukraine.
MOSCOW, Oct 31 (Reuters) – Russia’s central bank raised its
main interest rate much more than expected on Friday, trying to
tackle a sliding rouble and climbing inflation as plunging
global oil prices and Western sanctions hurt the economy.
However, the bank said that it had not changed its rouble
exchange rate intervention policy, confounding speculation that
it might use Friday’s meeting to announce changes that would
have enabled a stronger defence of the rouble.
MOSCOW, Oct 30 (Reuters) – Russia will raise interest rates
this week to curb inflation and prop up the rouble, analysts
forecast in a Reuters poll, as the central bank tries to contain
fallout from the Ukraine crisis and plunging oil prices.
But they predicted that an expected 50 basis point rate rise
at Friday’s central bank board meeting would only gradually
reduce inflation and provide limited support to the weakening
currency. The increase, which would be the fourth this year and
take the benchmark rate to 8.5 percent, would also contribute to
an economic contraction over the next three quarters.
MOSCOW, Oct 29 (Reuters) – A debut auction of forex repos by
Russia’s central bank on Wednesday met with lacklustre demand,
with analysts saying banks were deterred from taking up the
offer by a relatively high interest rate and short-term nature
of the instrument.
The $50 billion repo programme is seen as one of the steps
to shore up the rouble, which has been plunging as a result of
falling oil prices and the impact of Western sanctions imposed
over Ukraine, at a time when Russian companies need billions of
dollars to pay impending foreign debt payments.
MOSCOW (Reuters) – Pressure is growing on Russia’s central bank to adopt more radical measures to defend the tumbling rouble, such as interest rate rises, but there is no easy fix.
The bank’s board meets on Oct. 31 to discuss monetary policy and there is growing speculation it may soon raise rates to support the rouble, which is being hit by plunging oil prices and Western sanctions imposed over the Ukraine crisis.