Russian Economy in 2015. Trends and Outlooks. (Issue 37)

Publication date
Tuesday, 07.06.2016

Authors
Mau V., Bozhechkova А., Kiyutsevskaya А., Trunin P, Belev S., Mamedov А., Fomina Е., Alaev А., Abramov А., Shadrin А., Izryadnova О., Drobyshevsky S., Kazakova М.,Tsukhlo S., Idrisov G., Kaukin А., Ponomarev Yu., Bobylev Yu., Gataulina Е., Shagaida N., Uzun V., Yanbykh R., Volovik N., Baeva М., Knobel А., Karachurina L.Klyachko Т.Dezhina I.Malginov G., Radygin А.Apevalova Е., Polezhaeva N., Zadonsky G.Sternik G.Starodubrovskaya I., Kazenin К.Tsymbal V., Zatsepin V.

Series
Russian Economy: Trends and Perspectives

Contents

Section 1. Russian Economic Policy in 2015: Anti-crisis measures or structural reforms (Mau V.)  9
1.1. Global trends: the general and the specific 9
1.2. Economic situation in Russia: put-off crisis in the context of rent model 17
1.3. Anti-crisis economic policy 19
1.4. Priorities and risks for forthcoming period 29
Section 2. Monetary and Fiscal Policies 33
2.1. Monetary policy (Bozhechkova А., Kiyutsevskaya А., Trunin P.)  33
2.1.1. Money market 33
2.1.2. Exchange rate policy decisions and exchange rate dynamics 40
2.1.3. Inflation processes 43
2.1.4. Key monetary policy decisions 47
2.1.5. Balance of payments and ruble exchange rate 50
2.2. State budget (Belev S., Mamedov А., Fomina Е.)  55
2.2.1. Basic parameters of Russia’s budget system 55
2.2.2. New tax revenues in Russia’s budget system 58
2.2.3 Characteristics of Russia’s budget system 63
2.2.4. Basic parameters of the 2015 federal budget and outlooks for 2016 65
2.3. Intergovernmental fiscal relations and subnational finance (Alaev А., Mamedov А., Fomina Е.)  70
2.3.1. Analysis of principal parameters of consolidated budgets of subjects of the Russian Federation 70
2.3.2. Financial support from the federal budget 75
2.3.3. Debt policy at regional level 78
Section 3. Financial Markets and Financial Institutions 83
3.1. The key trends in Russia's domestic stock market (Abramov А.)  83
3.1.1. The comparative features of two Russian crises 83
3.1.2. The current crisis against the backdrop of world financial cataclysms 86
3.1.3. Liquidity issues in the stock market 90
3.1.4. The impact of foreign economic sanctions and the freeze of accumulated pension savings on Russia's financial market 94
3.1.5. Competition with foreign stock markets 98
3.1.6. The decline of the capitalization index of Russian joint-stock companies 102
3.1.7. The role of government in the financial market 104
3.2. Stock market infrastructure (Abramov А.) 106
3.2.1. The payment settlement infrastructure of the Moscow exchange 106
3.2.2. Segmentation of the stock exchange market 108 3.2.3. Development projects and current operations 110
3.2.4. Equity structure, finances and capitalization 110
3.3. The market for shares in Russian companies (Abramov А.)  114
3.3.1. Factors determining the share market behavior 114
3.3.2. Segments of the domestic share market 116
3.3.3. The institutional structure of and competition in the market for shares 119
3.3.4. The impact of the market for shares on the national economy 120
3.4. The bond market (Abramov А.) 122
3.4.1. General features of Russia's domestic bond market 122
3.4.2. The growth factors of the market for corporate and regional bonds 124
3.4.3. The segmentation of the market for corporate and regional bonds 127
3.4.4. Competition in the bond market 130
3.4.5. Corporate bonds and economic growth 133
3.4.6. The market for government securities 134
3.5. Futures market (Abramov А.) 138
3.6. Investors and financial intermediaries (Abramov А.) 141
3.6.1. Domestic institutional investors 141
3.6.2. Brokers and individual domestic investors 144
3.6.3. The banking system 148
3.6.4. Foreign portfolio investors 150
3.7. Risks on the financial market (Abramov А.) 157
3.7.1. Financial risks in 2015 157
3.7.2. The risks associated with the domestic financial market's high dependence on foreign investors' behavior 158
3.7.3. The risks associated with the ruble's exchange rate decline in the medium term 158
3.7.4. The risks associated with foreign debt servicing by banks and non-financial companies 159
3.8. Municipal and subfederal loan market (Shadrin А.) 161
3.8.1. Market development dynamics 161
3.8.2. Change in structure of accumulated debt 162 3.8.3. Loan structure 162
Section 4. The Real Sector of the Economy 171
4.1. Production of the microstructure (Izryadnova О.) 171
4.1.1. Dynamics of the Russian economy in 2015: the effect of external and internal demand 171
4.1.2. Utilization of GDP in the 2011–2015 period: consumer and investment demand 176
4.1.3. The GDP pattern by sources of income 180
4.1.4. Dynamics and the pattern of production by the type of economic activities 181
4.2. Decomposition of Russia’s GDP growth rates, 2015–2016 (Drobyshevsky S., Kazakova М.) 186
4.3. Russian industrial enterprises in 2015 (on the basis of business surveys) (Tsukhlo S.) 194
4.3.1. Year 2015: was there an industrial recession? 194
4.3.2. Movement of major indicators of Russian industry in 2015 199
4.4. Industrial production dynamics in particular sectors of industry (Idrisov G., Kaukin А., Ponomarev Yu.)  207
4.4.1. Late 2014/early 2015 (March–April): uncertainty and polarization of industries 208
4.4.2. April–September 2015: building new expectations and gradual economic stabilization 210
4.4.3. October–December 2015: worsening macroeconomic context and a new round of downturn 212
4.4.4. Wholesale and retail trade: protracted fall 214
4.5. Investment in fixed assets (Izryadnova О.) 217
4.5.1. Conditions and factors of investment activity 217
4.5.2. Material and productive resources of investment activity 219
4.5.3. Investment in fixed assets by type of ownership 221
4.5.4. Features of financing investment in fixed assets 222
4.5.5. Dynamics of fixed investment in 2015 224
4.6. Oil and gas sector (Bobylev Yu.)  227
4.6.1. Dynamics of the global oil and gas prices 227
4.6.2. Dynamics and production pattern in the oil and gas sector 228
4.6.3. Dynamics and structure of oil and gas export 231
4.6.4. Dynamics of prices for energy products on the domestic market 233
4.6.5. Prospects 234
4.7. Import substitution in the conditions of food embargo (Gataulina Е., Shagaida N., Uzun V., Yanbykh R.) 236
4.7.1. Production of agricultural and food products 236
4.7.2. Affordability of food products for population 238
4.7.3. Trends in imports and exports of agricultural and food products 239
4.7.4. Import substitution 241
4.7.5. Changes in budget support 245
4.8. Foreign trade (Volovik N.) 251
4.8.1. State of global trade 251
4.8.2. Russia’s terms of trade: prices on major goods of Russian exports and imposts 254
4.8.3. Main indicators of Russian foreign trade 257
4.8.4. Regional pattern of Russian foreign trade 261
4.8.5. Regulation of Russia’s foreign trade 262
4.9. Russia’s participation in WTO trade disputes (Baeva М., Knobel А.) 266
4.9.1. WTO trade disputes in which Russia participates as a complaining country 266
4.9.2. WTO trade disputes in which Russia acts as a defendant 269
4.9.3. WTO trade disputes in which Russia participates as a third party 273
Section 5. Social Sphere 289
5.1. The standard of living (Izryadnova О.)  289
5.1.1. The formation of money income 289
5.1.2. The monetary expenses of the population 292
5.2. Migration processes in Russia (Karachurina L.) 293
5.2.1. Long-term migration 293
5.2.2. Novations in migration legislation 296
5.2.3. External labor migration 298
5.2.4. Internal migration 304
5.3. Challenges facing higher education in Russia (Klyachko Т.) 305
5.3.1. Dynamics of number of students of Russia’s higher education institutions 306
5.3.2. Quality of higher education 310
5.3.3. Employers’ need for employees with secondary vocational education 311
5.3.4. Higher education graduates working in jobs related to their degrees 313
5.3.5. Employers’ qualitative assessment of employees’ basic job skills 315
5.4. The situation in the science and innovation sphere (Dezhina I.)  316
5.4.1. Budget constraints 316
5.4.2. New target indication in the field of research and development 318
5.4.3. Science at higher educational establishments 320
5.4.4. The main directions of reform in the RAS 322
5.4.5. Trends in the technological innovation sphere 329
5.4.6. New infrastructure projects 333
5.4.7. The national nechnology initiative 334
5.4.8. The effects of economic sanctions 337
Section 6. Institutional Changes 345
6.1. The situation in the public sector and privatization (Malginov G., Radygin А.) 345
6.1.1. The scope of public property 345
6.1.2. Privatization policy 350
6.1.3. Improvement of legislation on privatization 361
6.1.4. The presence of the State in the economy and issues relating to the management of subjects operating in the public sector 366
6.1.5. The budgetary effect of government property policy 371
6.2. Evolution of bankruptcy institution: from insolvency of state-owned enterprises towards electronic SRO trading facilities (Apevalova Е., Polezhaeva N., Radygin А.)  379
6.2.1. Bankruptcy legislation in post-Soviet Russia 379
6.2.2. Bankruptcy law of 2014–2015: systemic updates 382
6.3. The real estate market in the Russian Federation 390
6.3.1. The market of land plots (Zadonsky G.) 390
6.3.2. Housing mortgage lending (Zadonsky G.) 393
6.3.3. Price dynamics on residential property (Malginov G., Sternik G.) 397
6.3.4. Building, commissioning and supply of new housing (Malginov G., Sternik G.) 405
6.3.5. Forecast of the residential housing development in the capitol region (Malginov G., Sternik G.)  408
6.4. The North Caucasus: risks are on the rise 412
6.4.1. An aggravation of the situation around the inter-Islamic conflict in the North Caucasus (Starodubrovskaya I.)  412
6.4.2. Local self-government: alterations in regional Legislation as Risk Triggers (Kazenin К.) 419
6.5. Military economics and military reform in Russia 422
6.5.1. Economic and political preconditions for new type of warfare 422
6.5.2. Information-related aspect of defense control (Tsymbal V.)  424
6.5.3. Military-technical procurement of armed forces (Tsymbal V.) 425
6.5.4. Recruitment policy (Tsymbal V.) 427
6.5.5. Reform to implement the state defense order (Tsymbal V.) 428
6.5.6. Military-financial policy (Zatsepin V.) 428

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