When the crisis in Russia ends: forecasts

The situation in Russia is not the best way. Despite the temporary lull, and in some cases the improvement of the situation, analysts and economic experts do not cease to assert about the coming next wave of the crisis. Both businessmen and ordinary people live in anticipation of improving the situation and the period when the crisis in Russia is coming to an end. According to the Minister of Economic Development of the country Alexei Ulyukaev, the situation will stabilize in 2016. He argues that long-awaited economic growth will replace the prolonged recession. Unfortunately, not all leading experts adhere to this opinion.

What is the associated stabilization in Russia in 2016?

Forecast Ulyukaev and several experts on the improvement of the situation in the country by 2016 has a direct link to the international oil market. According to preliminary estimates, by the end of 2015, the ruble should fundamentally strengthen its positions against the backdrop of a global rise in oil prices. Inflation should decrease to 2-2.5%. Stabilization is expected in connection with the planned increase in consumption and stimulation of investment. At the moment, according to the minister, the Russian government is taking active steps to attract foreign investors to major projects in the automotive industry. As for the budget deficit in 2015, the declared figure corresponds to 2-3 trillion rubles in theory. In fact, everything looks different, which, in fact, puts such optimistic assumptions under attack.

"The crisis in Russia is coming to an end" - this statement makes us doubt that the budget of 2015 and the preliminary budget plan for the next three years laid the cost of oil at $ 90 per barrel. Today the price of fuel barely reached the mark of $ 55. The lack of funds is evident, therefore, in the next three years, the budget deficit will increase, which makes a quick overcoming of the crisis impossible.

Optimistic views on the situation

When the crisis in Russia ends, the economy begins to experience its recovery. This has always been the case, for, unfortunately, crises are not uncommon. Improvements are felt in almost all sectors, citizens of the country raise their standard of living. But it's too early to talk about this today. Of the most optimistic forecasts, it should be noted those who say that it is impossible to avoid recessions on the way to the resolution of a powerful economic system. Crises are the precursors of a rapid leap in development. They serve as a tool to eliminate contradictions. The lower the country falls, the more effective will be its further prosperity.

The analogy with 2008

In 2015, everything is not the same as it was in 1998. After the rapid fall of the ruble in 1998, foreign goods began to be replaced by products of domestic production. This only stimulated the internal development of the state. Industrial domestic production went so far that the echoes of a favorable situation were felt in 2000. Today, despite the fall of the ruble, domestic industry and production have not intensified. And instead of lifting you can observe a completely opposite situation. The government has not yet taken any active measures to eliminate the circumstances, which automatically suggests that waiting in the near future for the transition period, when the crisis in Russia is coming to an end and dawn is beginning, is not worth it.

Russia today. Why wait?

Looking at Russia today, you can clearly notice the dominant components of the crisis:

• A sharp decline in industrial production.
• The devaluation of the ruble.
• Crisis in the banking industry.

This implies that it is too early to talk about when the economic crisis in Russia will end. No one gives any guarantees that the difficulties will not spread to other sectors of activity. Many associate the deterioration of the economy only with external factors, although in fact industrial production began to lose momentum in 2012. It was during this period that the Ministry of Economic Development proposed three options for the development of further events until 2030. In 2015, you can observe the implementation of the most negative option. Modernization of the Russian Federation did not take place, the only engine for development remains the development and sale of energy carriers, a stable decline in GDP, proximity to the recession. It is interesting that the government knew about the future circumstances as far back as 2013, when it, without advertising, adopted the third negative variant of the country's economic development.

What measures does the government take and how does it help in the crisis?

Few experts are taken to answer exactly when the crisis in Russia will end. Moreover, the prerequisites for its appearance have already appeared long ago. Thus, in 2013 the government began active revocation of licenses from banking and credit organizations. The decision by the end of 2014, after the dissemination of information about it, led to a sharp outflow of capital. People actively began to withdraw funds from accounts, which only exacerbated the situation and led to the bankruptcy of many financial institutions.

Crisis and sanctions

After the sanctions of 2014, the circumstances aggravated. And counter-efforts by the Russian Federation and the drop in the cost of oil on the world market almost completely nullified attempts to restore the country's economy. Separately, we can say about sanctions, which led to higher prices of products. Business became unable to work without margin, which led to an increase in prices to a level that was not lifted for an ordinary citizen of the country. The reduction of demand led to the closure of businesses. The tandem of external and internal factors led to a reduction in business activity and a decrease in demand in all segments. As and when the crisis ends in Russia, it is too early to speak, since the recovery will begin with an increase in people's living standards.

What do astrologers say?

Not ignored by the current issue of the crisis and well-known astrologers. Pavel Globa calls not to be afraid of a default in 2015. Despite disappointing forecasts, the astrologer focused on the fact that the euro will not be more than 100 rubles, and a complete liquidation of the situation will take place only in 2017. Other clairvoyants do not give an answer to the question of when the crisis in Russia will end. The predictions of the majority speak of a positive outcome for the state and unfavorable for America and Ukraine, and whether it will be in reality, no one knows.

What led to the crisis?

It's still too early to talk about whether the crisis in Russia has ended. For this to happen, it is necessary to eliminate the root causes of the problem. This will be the first step towards the welfare of the state. Many rely on sanctions from America and Europe, although this fact has not had a dominant effect on circumstances. He simply left a negative imprint on the state of the economic market. Reduction of investments of non-residents from the production sector worsened the competitiveness of domestic goods on the international market. The inflow of capital can not be restored until the country is in decline. The total dependence on the trade in raw materials has shaken the economy because of the fall in world oil prices, of which there is no evidence of restoration to the previous level. The fall of the ruble to its historical lows and the parallel raising of interest rates by the Central Bank of the Russian Federation led to problems in the population. The conflict between Russia and Ukraine added fuel to the fire. None of the root causes of the problem at this stage of Russia's development can not be completely eliminated, which gives serious grounds for judging the near completion of the crisis.

What will happen next?

The development or decline of the economic crisis in Russia depends solely on the introduction of new sanctions, which can lead to a loss of control of businessmen over their foreign capital. Isolation of the state can not be avoided. The outcome of the events will be visible after the end of March 2015, but for now the situation is static, and businessmen have to look for new ways of their development. There are no changes due to the situation on the world oil market. Having in the asset the cost of fuel at $ 55, positive changes should not wait. The total lack of government support for the business is far from being the best. If we compare the situation to 2008, similarity can be seen only in the oil market conditions. In all other respects, there are differences, especially in areas that are experiencing decline: real estate, banking segment and production. While sanctions are increasing, and the oil market is stagnant, it's too early to talk about when the crisis in Russia will end. Forecasts with a positive connotation speak of developments in IT, telecommunications and pharmaceuticals. Given the small percentage that these segments occupy in the economy, the global improvement of the latter is still out of reach.

The most pessimistic forecast

Among the numerous forecasts, there are also worst scenarios for the country. There is a possibility that by the end of 2015 most of the state financial institutions, including those that form the financial system, will simply be ruined. This will happen due to the growth of the dollar to the level of 80 rubles. At the same time, the price of oil will drop to $ 40 per barrel. Financial changes in GDP will reach 10% in the red. The Central Bank will be forced to raise the interest rate from 17% to 37%. As a result, the countries of the world will refuse to lend to Russia, which will cause the complete collapse of the state financial system. The situation will not even allow us to think about when the crisis in Russia will end. Predictions, even the best, will not change anything.

Last year, Russia kept GDP growth at 0.5%. The indicator of 4% is already real in 2015, and if we compare it with a further drop in oil, the pessimistic forecast will no longer seem so unrealizable.

Everything depends on the government

In the current situation, only the Russian government is able to determine when the crisis in Russia will end. Forecasts are useless, since the variability of the situation is determined by the country's leadership. For example, if the Central Bank reduces the key rate, which is simply unrealistic, this will cause a high inflation rate. At the same time, the credit market will remain unscathed. The fall in GDP will be kept within 4%. Competent management decisions can lead the country out of the crisis only if the cost of oil rises to $ 60. Within 2-3 years it will be possible to achieve stabilization of the situation, provided that no less than 3 trillion rubles are invested in the domestic economy of the country. Whether the domestic government will take such a step, no one can say.

When the crisis ends: Russia leads an anti-crisis policy

Experts are inclined to the failure of the anti-crisis policy of the state. For example, most of the funds for economic recovery are allocated to banks to provide loans to businesses, which, according to the government, should establish domestic production of goods. Only the fact that at 30% no one needs credits is past the attention, and the cost of production at such a rate will remain unclaimed. Banks, understanding the alignment, redirect funds to the currency exchanges for earnings, which only increases the growth rate and aggravates the situation. A fatal role is played by the oil dependence of the economy, which does not even allow us to consider the time interval when the crisis in Russia ends. The world market will change, which will affect the state of the economy of the state. If you manage to survive the difficulties, this fact will certainly stimulate a new wave of problems after a while.