2019 from my point of view for the Russian economy carries too many risks to be able to count on GDP growth at year-end. I see six key threats that I put on because of the negative effects on the economy.
1. Fight the state for control and taxation of self-employed. A passionate desire of the state to squeeze more money from the population by any means can lead to unexpected for the authorities effects, including reduction of Bank transfers and loss of public confidence in banks in General, with the threat of “RAID savers” on the banking system to “dollarization” (or “Evrovidenie”, “ironicaly” depending on the region of the Russian Federation) or the emergence of monetary surrogates like cryptocurrency, the circulation of which is not controlled by the state.
2. The “rules of the game” in the construction market during the transition from shared construction “Expo-accounts”. In 2019, the year comes the moment a ban of shared construction. It threatens mass bankruptcy of small and medium-sized construction companies, especially in regions with rising unemployment, decline in production of construction products and volume of housing.
3. The introduction of a new package of sanctions by the US and its allies. I do not think that the new package of sanctions will be disconnected from SWIFT and a ban for Russia and Russian companies in dollars, but the ban on buying new Russian sovereign debt and foreign currency bonds of Russian banks is very likely. That could lead to another devaluation (although perhaps the devaluation of the ruble last couple of years was over?) and the rising cost of borrowing. Although this has advantages for private investors — the interest rate of sovereign bonds of Russia and bonds of banks targeted by the sanctions in other non-dollar currencies will grow, and the state is interested in attracting to your debt private investors.
4. The fall in oil prices. Well, this chronic threat is always hanging over our oil-dependent economy. The price of a barrel of oil in dollars has dropped from 80+ to $ 53. This decline may continue in the future. Under Gorbachev, oil cost about $ 8., and under Yeltsin in 1998, it cost about 13 dollars. Since then, the dollar, of course, devalued, but the “campaign” of oil in the area of $ 20. a barrel will make a lasting impression on Russia, accustomed to live in the days of super-expensive oil. Although even in this case, the probability of default of Russia on its external debt is extremely low. But the value of the dollar to the population in roubles can be a three-digit and the ruble may reach parity with the Japanese yen.
5. The VAT increase will lead to approximately an additional withdrawal from the economy of 400-500 billion rubles.
— this will affect the already not too high profitability of business in Russia;
— raise prices, accelerating inflation to 5-7%, which will make a 1000 ruble increase in their pension just compensation inflation
— will reduce the purchasing power of the population, which will put pressure on businesses whose sales will fall;
— can lead to a series of increases in the rate of the Central Bank of the Russian Federation to combat inflation, which will increase the cost of borrowed money for business.
6. Disconnection from the global Internet. The optimism of Russian officials, running with that idea, is appalling. Do they really think that the Internet can be reduced to the site “public Services” Yes “schoolmates” “Vkontakte”. It will be a disaster for technological and trading business, and people will remain without access to cheap products from “Ali Express”, which somehow helped to smooth the drop in income.
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