“We have to solve many pressing problems in the economy and, most importantly, step by step to improve the welfare and quality of life to all citizens of Russia, each of us in the coming year feel changes for the better,” promised President Vladimir Putin for a new one, 2019. But at the end of 2019, it became clear that changes, the Russians again have not waited. According to the results of the survey “Levada-center”, in late December, 43% of them believe that in 2019 the standard of living in the “core population” is worse than 2018 this is evidenced by the statistics, and the mood of the people and business.
the Frustrations of the economy…
In January – September 2019 (the data for the year Rosstat has not yet published) real disposable money incomes of people increased by a tiny 0.8 per cent. Increased poverty (the number of people with income below 10 000 rbl.) – in the II quarter of 2019, the income was 12.7% of Russians against 12.5% in 2018 Increased subjective poverty – the proportion of people who rate their situation as “poor” and “very bad” increased from 23.3 to 26.5%, according to data analysts Ranepa.
tackle poverty – one of the goals of the may decree of Putin. They are all formulated in 13 national projects, which should stimulate economic growth in the next for four remaining until the next presidential elections years. So, according to the national project “Demography” to 2024, the level of poverty should be reduced in 2 times, and life expectancy, on the contrary, to increase to 78 years, the real incomes of the population should grow steadily.
however, in 2019, the authorities were unable to approach neither goals nor even to the implementation of the national projects. Although to fully appreciate the results for 2019 will be possible only next year, the preliminary results have been disappointing, according to data of the accounting chamber. In January – September 2019 was spent a little more than half of the funds pledged for national projects, some of them failed to spend even a quarter of the put costs (e.g. the national project “Digital economy”). To achieve the goals are still too far away. According to the chamber, for January – September, 2019, Russia’s population has not increased, but decreased by more than 230 000 people life expectancy was only 72.9 years (target 78), while the poverty rate increased (target – 6.6 per cent). In June the Ministry of economic development acknowledged that many of Putin set a task to 2024 to achieve is simply impossible, Bloomberg reported.
Maxim Oreshkin: “In 2019 we will see a slowdown in the economy,” Minister of economic development about the Chinese wall with Rosstat, the income of the population, pension reform, and important appointments in the subordinate agencies, the Economy
the economy in 2019, there was nothing neither bad nor good, says Global chief economist BCS Vladimir Tikhomirov. “We are stuck in a state of stagnation,” – he describes, and the population felt there is neither growth nor development. The whole year the government spent in disputes as to spend collected due to the increase in VAT from 18% to 20% money (more than 600 billion rubles). For example, where and whether to build in the principle of high-speed railway and highway Moscow – Kazan, which is the international transport corridor Europe – Western China (for the final decision of the Prime Minister Dmitry Medvedev took until the end of October). National projects were run economic growth and private investment, but don’t grow no economy, no investment. The Ministry of economic development at the end of 2019 is waiting for modest GDP growth of 1.3% (economists do not even believe in such assessments), as well as acceleration of investments – 3.1% (but in January – September they grew by only 0.7%). A couple of weeks before the end of the year the government had to spend 20% of the Federal budget, or 4 trillion rubles, said first Deputy Prime Minister and Minister of Finance Anton Siluanov. According to forecasts by Accounta large chamber, 1 trillion. officials will not have time to spend in 2019 exactly.
…and investors
While officials were absorbed into the bureaucratic disputes, investors and Russians are increasingly disenchanted with what is happening. According to the survey “Levada-center”, 53% of respondents aged 18 to 24 would like to leave Russia. This is a record figure for the last 10 years. Another survey, conducted by VTsIOM, showed that 71% of entrepreneurs consider business conditions in Russia are unfavorable, every second believes that the situation will only worsen in the next five years. Private companies do not feel safe and reduce investments, said Professor at the Higher school of Economics Oleg Vyugin.
But investment companies vital to the economy. It is on private money accounts for more than 6 trillion rubles., which need to be involved for the implementation of national projects. But while even a slight growth of investments in fixed capital carried out at the expense of government investment, wrote to the Central Bank. “Investment activity of the enterprises kept the General macroeconomic uncertainty and the continued slowdown in consumer demand”, – explained analysts of the Central Bank.
On the background of discussions about the investment climate, orders to improve and reduce the influence of the security forces entrepreneurs one after another found themselves in jail. Arrested was the founder of Baring Vostok Michael Calvey and his team, co-owner of Antipinsky oil refinery Dmitry Mazurov, the criminal case against the founder of a car dealership “Rolf” Sergei Petrov (November Petrov said that “Rolf” will be sold), the searches were the co-founders of IT-companies Nginx Maxim Konovalov and Igor Sysoev (they were associated with the claims Rambler) and one of the founders of the company “Vimm-the bill-Dann” David Yakobashvili (the case was opened against him on the complaint of former partner of the businessman in the business of Boris Minagi). “Business has no risks no longer exists, and only the fear that if you become successful, you come and everything will be taken away” – complained the Deputy of the state Duma Andrey Makarov. Increased pressure on the Russians in late November he was arrested last for today, the 23rd defendant in the “Moscow case” against the protesters.
At the St. Petersburg international economic forum Putin urged to avoid even the formal possibility for abuse of the right to put pressure on business to hold a consistent cleansing of power structures and judiciary of unscrupulous persons. But only at the end of December 2019 yet agreed to some softening of criminal risks. Himself in the Duma introduced a bill to mitigate liability for tax and currency violations, as well as the change of article 210 of the Criminal code (CC), according to which employees of the organization can be accused of organizing a criminal community. On the bill of article 210 of the criminal code will not apply to employees, founders and CEOs, if they just included in the regular structure of the enterprise. Currency violations, the bill has to first be punished with administrative fines, and then to introduce criminal liability, increase the thresholds, tax violations, for which it is possible to initiate criminal proceedings.
New expectations
was Not in 2019 the economy is not only investment, but also demand. Demand has become one of the major debates of the year: do I need to stimulate it with cheap money as to solve the shortage without structural reforms? It is not a question last year, and the General state of our economy: companies don’t see demand either internal or external, said Tikhomirov. Future government spending aimed at encouraging greater offer than demand, explains the head of Department of analysis and strategic marketing PSB Nicholas Kashcheev. As a result, they are able to achieve a limited short-term effect, but sustained growth is not likely to happen, he said: “If Russia’s economy is growing, for example, 2%, and the world – at 3%, that (metaphorically, of course) our real growth by analogy with the real interest rate minus 1%”. Economic growth at 2% for a developing economy is equal to zero, supports the head of the Russian office Rainier AG Evgeny Kabanov.
But in the upcoming 2020 economy is entering in the best conditions, than was part of 2019, I am sure chief economist for Russia and CIS Merrill Lynch Vladimir Osakovsky: “From the point of view of macroeconomics and geopolitics, the situation should improve.” But if the majority of developing economies will improve their performance in 2020 compared to 2019, the Russian economy will show relatively low growth, skeptical analysts of the Bank “URALSIB”: even a strong fiscal policy and the lowest among developing countries, the debt burden does not compensate for the lack of low growth.
