Western media had already been reporting that the Russian economy suffers from the imposed sanctions. Lately more and more Russian organizations are also admitting that the economy is going through a rough time. The Russian economy is facing a number of big problems. First of all the capital flight. In response to the annexation of Crimea, the EU imposed sanctions on a number of banks. For this reason, investors pulled back, with the wealthy taking their money out of Russian bank accounts. This year, over 100 billion dollars have already been removed from Russia. The Russian Central Bank expects a capital flight of 128 billion dollars (102 billion Euro). Early reports assumed a capital flight of 90 billion dollars.
The value of the rouble, meanwhile, has also decreased sharply. Compared to the Euro, the currency has lost nearly 20% of its value. Stock exchanges are also not doing as well as in previous years. This year, there were two IPOs with a total value of 3 billion dollars. Last year, until mid-November there were 35 issues with a total value of 28 billion dollars. The economic growth for next year has also been adjusted downwards. Inflation next year is expected to be 6-6.5%. An additional problem is the low oil price, Russia's main source of income. When establishing the budget, the government assumed an oil price of 100 dollars a barrel. One economist calculated that for every dollar the oil price goes down, the country will miss out on 2 billion dollars in revenue. To limit the damage, the Central Bank abolished the bandwidth within which the rouble can change value. That means the currency was left completely free, which had a slightly positive effect.
On the other hand, many Russian companies and the government have large capital reserves, so most companies can take big hits. A mere 7% of companies has to refinance in the short term. And although rating agency Moody's downgraded the country from Baa1 to Baa2, this still means the country falls within the 'investment grade'.
Russia and China are strengthening the economic relations between the countries. Gas supplies from Russia to the Asian superpower are at the heart of the relations. In the past months, the nations closed two large gas deals. The deals were closed for thirty years. The first deal, regarding 38 billion cubic metres of gas, yields Russia 400 billion dollars. The second deal is about another 30 billion cubic metres. In addition to bringing in a lot of money for the Russian treasury, and the country becoming less dependent on Europe, there is another advantage. Trade between the countries largely occurs in the national currencies rather than in dollars. And Chinese banks are willing to loan more to the Russians. Due to the EU and US sanctions, Russian banks are hardly able to collect money from the international capital markets. Through cooperation with Chinese banks, the Russians are given a bit more breathing space. One Russian bank is even said to consider moving from the London stock exchange to the exchange in China.Armenian export lower due to bad apricot harvest
The Armenian Minister of Agriculture recently announced the country's export figures. In the period until November 7, the country reportedly exported 40,245 tonnes of fruit and vegetables. In general, the country exported less due to a disappointing apricot harvest.
The export consisted of 12,717 tonnes of fruit, of which 5605 tonnes of grapes and 2964 tonnes of peaches. The vegetable export amounts to 6949 tonnes, while 20,582 tonnes of potatoes were exported.
A year before, export was still over 47,000 tonnes, with the export over the whole of 2013 amounting to 64,505 tonnes. The export is lower this year, due to a decreased apricot harvest. In 2013, 36% of the export was made up of apricots.
The Armenian government is investing in events to increase export of agricultural products. 150 exporters, among others, were able to travel to Moscow to establish relations.
Agricultural industrial area in Siberia
Near the town of Osinniki, in the Kemerovo region, an industrial centre for agricultural produce is under construction. The park costs 2-2.5 billion roubles (44.5-55.6 million dollars). In addition to storage capacity, the centre is also to offer room to the processing industry, with a juice factory being housed in the centre, for instance. The juice plant is to produce 2 million litres of juice annually. In addition, cucumbers, tomatoes, watermelons, sauerkraut and soft fruit are to be processed in the centre. So far, 562 million roubles (12.5 million dollars) have been invested, over the next two years 450 million roubles (10 million dollars) will be added to that.
Peru biggest Latin American exporter to Russia
According to a Peruvian growers association, the South American country is the largest exporter to Russia in Latin America. According to the organization, export is growing by 10 million dollars a year, and it's possible this will increase further thanks to growing demand. Fruit export to Russia went up by 16% in the first half of this year, and is expected to amount to 80 million dollars by the end of this year. Five years ago, export from Peru to Russia was nil.
Indonesia considers export preserves
Export from Indonesia to Russia tripled between 2009 and 2013, to 3 billion dollars. Both countries want to further increase the export to 5 billion dollars. Indonesia is also considering the export of tinned fruit to Russia. Statistics show that the country did not export tinned fruit to Russia in the past five years, with the export mainly consisting of frozen vegetables and nuts.