We have collected the most famous Russian economists to learn their predictions for the year 2018 and to take stock of the passing year. Former economy Minister Andrei Nechaev, corresponding member of RAS, Director of Institute of Economics RAS Ruslan Grinberg, Director of Institute of strategic analysis FBK Igor Nikolaev, the Chairman of the scientific Council of the Institute of Economics of growth to them. Stolypin Yakov Mirkin told the Russians about how to protect their income.
photo: Alex geldings
The Russian economy lived another year that was very controversial. On the one hand, most macroeconomic indicators show that the country began to emerge from the crisis after two years of failure: GDP though not much, but still growing, inflation was a record low, the ruble is stable. On the other hand, real incomes continue to decline, and, as shown by numerous polls, a tough financial time for the majority of Russians continue.
— Do you think the preliminary results 2017 unexpected? They show that the country is emerging from the crisis?
Igor Nikolaev: — the Outcome was controversial, but to call them the unexpected is impossible. It would be logical to assume that if the crisis is over — so, the reasons for which he was summoned, weakened or eliminated.
But we have a crisis structurally burdened by external factors — falling oil prices and sanctions. It turns out that the crisis is over, and its causes and structural problems left?
Has become easier, because oil prices increased from last year’s 40 to 60 dollars per barrel. But our economy has not ceased to be commodities, the share of small business has not increased from a very low level of 20%, budget imbalances not eliminated. So what happened in the past year, is not out of the crisis, and adaptation to the new conditions. That is, there was a correction, a temporary improvement, and problems not resolved. And figures testify to it.
View the latest data of Rosstat: agriculture — minus 2%, construction — minus 3.1%, the industry — at zero. While the Ministry predicts that by the end of the year we expect Russian GDP growth of 2.1%. But this will not be in the first three quarters was 1.6%. This means that the crisis hasn’t gone away, you should not relax.
photo: Natalia Muslinkina
Ruslan Grinberg: the President of the Russian Federation at a recent press conference said that began a steady growth. I understand that the government needs to radiate optimism. But other developing countries with which we are comparable, for example, China, India, annual GDP growth is 6-7%.
It seems that our good oil story is over, we rejoice that we get off the oil needle. But on the other hand, there are compensating factors that could send the economy on a sustainable growth path. Prolonged stability becomes stagnation, and we are going through a time.
photo: Natalia Muslinkina
Yakov Mirkin: — Let’s look at the whole picture. In 2016, the growth of prices not only for raw materials but also to metals that would be beneficial for Russia. In addition, during the crisis managed to keep volumes of extraction and export of raw materials, despite the fact that in 2013-2014, our Western partners have urged to reduce dependence on Russian exports. But this relationship did not drop as fast as we feared.
In addition, if you look at the same data of Rosstat, we have “Islands of growth”: the military industry, agriculture, pharmaceuticals. But if you look more carefully, we have for this year there was a real economic miracle in the production of trams in 2014 we have produced 1-3 of the tram in a month, and now 20 trams. And we have the same economic miracle in the production of paving slabs.
But in terms of life expectancy, Russia occupies the 100th place in the world and GDP per capita we are ahead of even Malaysia. We “spike” the economy — when the government artificially creates the conditions for certain growth points: greater access to credit, government funding, tax incentives. That is, instead of normalizing market conditions as a whole, we build greenhouses around them is a desert plain.
— High stands us in recent months talking about the achievement of the country’s economic stability. But how is this stability combined with the continuing decline in real incomes?
photo: Natalia Muslinkina
Andrey Nechaev: — macro-economic indicators are so optimistic in official statistics, raise doubts and questions. The main thing that confuses — the extremely high volatility of the main components of growth.
The only thing stable, the fall in real incomes. Moreover, according to the last 10 years, this decline has accelerated. The population was mostly affected by the crisis. Now the volume of falling real incomes, such that we can say about the deterioration of living standards. The Russians comes the hard adaptation of the behavioral model to the new reality: people start to eat worse, reduce consumption.
We got the economic growth is low quality and very fragile. Maybe due to the low base effect will turn out at year-end GDP growth of 2%, but this growth is unclear for what, because he will not allow to solve social problems.
Yakov Mirkin: — the stability, about which we are told to fear. Though, because it is threatened by the instability of our financial system, which remains small — it is inadequate to the size of the economy.
Tell us about the stability of the banking system, but the three largest private banks turned out to be bad assets, and their save state. We are told that we have record low inflation of 2.5%. But inflation industrial manufacturers — 8%. The growth rates for transport — just 8%.
And finally, tell us about the stability of the ruble. We three “happy” was at the same time a stable ruble, which each time ended in an explosive risk, the entrance of speculators, carry traders non-residents in equity markets: this happened in 1998, 2008 and 2014.
Is the stability of the patient, fleeing on the principle of “heal thyself”. And this patient wants to live and even run at high speeds, so the doctor needs to apply special recipe.
— From your speech implies that all our macroeconomic indicators are uncertain and contradictory. Then name one most important, in your opinion, the factor that is most indicative would characterize the outgoing year.
Andrey Nechaev: — of Course, the falling incomes. This metric outweighs all else. Why all economic exercises if decreases the level of people’s lives?
Igor Nikolaev: — I agree: the dynamics of the real disposable income. This indicator and inflation taken into account — the same one super low. The question arises: why, with such inflation, real incomes are falling? If economic growth does not increase income of the population, then FIE on such economic growth.
Ruslan Grinberg: — It would be strange if I did not agree with my colleagues. Why then need an economy if not for income growth and improvement of people’s living standards?
But we have it really special. We are at the peak of its growth, it was believed that every fifth live well on one salary, now these “lucky” less. The remaining four-fifths are saved by the fact that they grow cucumbers, tomatoes on their six acres. People do not care about economic growth — they need real personal income.
— What are the economic risks threaten us in 2018?
Igor Nikolaev: — After the correction the economy this year, next year there will not be growth trajectory above the world average rate, as in the President’s goal to 2019-2020. Will be at best stagnation.
There are other risk factors: the aggravation of the external political situation, strengthening of anti-Russian sanctions (in February) and a possible drop in oil prices. Now there is interest from Saudi Arabia to extend the agreement by OPEC (the Memorandum signed by the 13 OPEC countries and 11 independent producers, including Russia, on a voluntary seduction of oil production. — “MK”), but participants are already discussing how to get out of it.
Plus kancevica in the US has reached a new level and increasing production. Our economy, which remained commodities, naturally reacts negatively to it.
Hence the forecast: in 2018 will not be a failure, but the performance will be worse than in 2017. In particular, GDP spill the beans about zero. However, on the real income might not be of failure, before the election, indexed pension, the salary will be pumping money for “social programs”. In this sense, the growing concern over 2019: what will happen after the election?
Ruslan Grinberg: — One of my Polish friends said about the Russian economy: “you Have a good situation, but not hopeless.” I believe that too.
On the one hand, there are no preconditions for social upheavals, turbulence. We determined the position of the leadership of the country: it is necessary to maintain stability. This means keeping inflation low, the budget deficit is not to widen, not to seek large construction sites which require significant investment.
But we lost the production of simple goods, it is impossible to compete with Asia. It is impossible to compete with Germany, USA for the production of investment goods. Therefore, to accelerate the economic growth, we have two options: to use the spatial potential of Russia, which is still in need of the degree is not used (development corridors, high-speed highways and Railways) and to develop large-scale housing construction, subsidized by the state.
Yakov Mirkin: My prediction — friendly. Russia is a piece of the global economy, and we will support demand from a growing world economy on Russian raw materials. This means that the trading basis of social stability will continue.
On the other hand, world prices for commodities is a financial product that depends greatly on what happens in the marriage of the two reserve currencies — the dollar and the Euro. And there is a high probability of sharp fluctuations.
The following risk factors — geopolitical shocks. In particular, the factor of North Korea, invisibly affecting the economy at the expense of unpredictability.
Third: there are several scenarios as to why the flow of hot money in the Russian economy from abroad will unfold that will create problems for the ruble, inflation, banking, and investments. This probability accumulates. The main thing — not to create over-concentration of risk to our patient — the economy — is not lost somewhere: any new sore will kill him.
Andrey Nechaev: — it is Important, what position on the socio-economic policy is the President. Clearly, we stand at a crossroads, because the current model is stalled. Strategic programs are being developed, but it’s unclear what this will evolve. Worst of all, if the programs are crossed as a snake with a hedgehog.
From the perspective of external factors important to decisions that the US sanctions will take in February. Europe has already said does not improve, but worsens the situation. But trump, otmivaniya from accusations of ties with Russia, nothing could resist will not.
One story, if there is a strengthening of personal sanctions (in this sense, the precedent with the arrest in France of Suleiman Kerimov — was a signal that the oligarchs have heard), the other — if you follow a blow to our entire financial sector.
Oil: according to the forecasts of the US Department of energy, their production will be more than 10 million barrels a day next year, and some experts say even more — 11-12 mln If so, then the United States became the largest producer of oil. Therefore, OPEC will take a different position — they will no longer make sense to artificially reduce the production. This can again “drop” the barrel. The questions raised and the banking sector, where large banks actively sanitize. So risk factors for the next year enough.
— Advise as to the background of the risks that you talked about, ordinary people to protect their income…
Igor Nikolaev: — Bad times in the economy has not yet ended, and to accept at face value the assurances of the authorities about the come stability not worth it. Now better to get yourself together and try to earn: you will not regret!
Now is the time to require the debtors to return the money borrowed previously: on their return will be more difficult.
But to buy a bitcoin I suggest, whatever the hype is now about it neither prevailed. In order to get into this market, we should at least understand the question, but for the vast majority of Russians this is still unknown territory.
Yakov Mirkin: is the Russian economy should be treated as a great adventure. In this adventure, the winner is the one who generates something new and loves change. In a changing environment should not count that you have someone to feed you, like the government, so it is important to maintain the ability to generate income at any age.
Man — goods on the labor market, so you need to invest in yourself, in your education, health, skills. It is not to take on too high credit risks that kill any future income of the family.
The same is true of the foreign exchange risk. Ruble still needs to prove that he is a stable currency. In short, I do not recommend to speculate on the financial markets, whose rules are unknown to you. But if you are in a financial “pyramid” or a “bubble”, I sincerely wish you to get out of it in time.