Russia Economic Report, No. 31, March 2014 : Confidence Crisis Exposes Economic Weakness

Real Gross Domestic Product or GDP growth slowed to an estimated 1.3 percent in 2013 from 3.4 percent of 2012. In January 2013, we projected 3.6 percent growth for 2013, but while the global economy has continued to improve at a moderate pace, Russ...

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Bibliographic Details
Main Author:	World Bank
Format:	Economic Updates and Modeling
Language:	English en_US
Published:	Moscow 2014
Subjects:	ACCESS TO CAPITAL ACCOUNTING AGGREGATE INVESTMENT ASSETS AVERAGE OIL PRICE BALANCE OF PAYMENTS BANK CREDIT BANK LENDING BANKING SECTOR BANKING SYSTEM BASIS POINTS BOND BOND INDEX BOND ISSUANCE BORROWING COSTS BUDGET DEFICIT BUFFERS BUSINESS CONFIDENCE CAPITAL ACCOUNT CAPITAL ADEQUACY CAPITAL FLOWS CAPITAL FORMATION CAPITAL INFLOWS CAPITAL INVESTMENT CAPITAL OUTFLOWS CENTRAL BANK COLLATERAL COLLATERAL REQUIREMENTS CONFIDENCE INDEX CONSOLIDATION CONSUMER CONFIDENCE CONSUMER CREDIT CONSUMER LOANS CONSUMER PRICE INDEX CONSUMPTION GROWTH CORE INFLATION CORPORATE PROFIT TAX CREDIT DEFAULT CREDIT DEFAULTS CREDIT GROWTH CREDIT RISK CREDIT RISKS CREDITORS CURRENCY CURRENCY BASKET CURRENCY SWAPS CURRENT ACCOUNT CURRENT ACCOUNT BALANCE CURRENT ACCOUNT SURPLUS DEBT PAYMENTS DEBTS DEFAULT RISKS DEPOSIT DEVALUATION DEVELOPING COUNTRIES DISPOSABLE INCOME DOMESTIC DEMAND DOMESTIC ECONOMY DOMESTIC SECURITIES ECONOMIC DEVELOPMENTS ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC SLOWDOWN EFFECTIVE EXCHANGE RATE EMERGING ECONOMIES EMERGING MARKETS EQUIPMENT EQUITY ISSUANCE EURO ZONE EXCHANGE RATE EXCHANGE RATE DYNAMICS EXCHANGE-RATE EXPENDITURE EXPENDITURES EXPORT GROWTH EXPORT PERFORMANCE EXPOSURE EXTERNAL BALANCES EXTERNAL BORROWING EXTERNAL DEBT EXTERNAL DEBT PAYMENTS EXTERNAL DEMAND FEDERAL BUDGET FEDERAL BUDGET DEFICIT FEDERAL RESERVE FINANCIAL CRISIS FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL STABILITY FISCAL BALANCE FISCAL BALANCES FISCAL DEFICIT FIXED CAPITAL FIXED INVESTMENT FOREIGN CURRENCY FOREIGN CURRENCY RESERVES FOREIGN DEBT FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN EXCHANGE MARKET FOREIGN INVESTORS FOREIGN LIABILITIES GLOBAL ECONOMY GLOBAL MARKET GLOBAL MARKETS GOVERNMENT BUDGET GOVERNMENT SPENDING GROSS CAPITAL FORMATION GROSS DOMESTIC PRODUCT GROWTH RATE GROWTH RATES HIGH-INCOME COUNTRIES IMPORT IMPORTS INCOME GROWTH INCOME INEQUALITY INDEBTEDNESS INFLATION INFLATION TARGETING INSURANCE INTEREST PAYMENTS INTEREST RATES INTERMEDIATION SPREAD INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL MARKET INTERNATIONAL CAPITAL MARKETS INTERNATIONAL FINANCIAL MARKETS INVENTORIES INVENTORY INVESTING INVESTMENT ACTIVITIES INVESTMENT DECISIONS INVESTMENT DEMAND INVESTMENT INCOME INVESTMENT PROJECTS INVESTOR CONFIDENCE JUDICIAL SYSTEM LABOR FORCE LABOR MARKET LENDING INTEREST RATES LEVEL PLAYING FIELD LOAN LOCAL CURRENCIES LOSS OF CONFIDENCE MACROECONOMIC ENVIRONMENT MACROECONOMIC STABILITY MARKET CONDITIONS MARKET CONFIDENCE MINIMUM CAPITAL REQUIREMENT MONETARY POLICY MUTUAL FUNDS NON-PERFORMING LOAN NON-PERFORMING LOANS NONPERFORMING LOANS NPL OIL DEMAND OIL EXPORTS OIL MARKET OIL MARKETS OIL PRICE OIL PRICES OIL REVENUE OIL REVENUES OIL SUPPLIES OUTSTANDING DEBT OUTTURN PENSION PENSION FUND PENSIONS POLITICAL RISK POLITICAL RISKS POLITICAL UNCERTAINTIES POLITICAL UNCERTAINTY PORTFOLIO PORTFOLIO ADJUSTMENT PORTFOLIOS POVERTY REDUCTION PRIVATE BANKS PRIVATE CONSUMPTION PRIVATE INVESTMENT PRIVATE INVESTORS PROFIT MARGINS PUBLIC FINANCE PUBLIC FINANCES PURCHASING POWER PURCHASING POWER PARITY REAL WAGE GROWTH RECESSION RELATIVE WEIGHT REMITTANCES RESERVE RESERVE FUND RESERVES RISK AVERSION RISK PREMIUMS SECURITIES SLOWDOWN SPARE CAPACITY STOCK MARKET STOCK MARKET VOLATILITY STOCK MARKETS STOCKS STRUCTURAL PROBLEMS STRUCTURAL REFORM STRUCTURAL REFORMS SUPPLY CONSTRAINTS SUPPLY SIDE SWAP SWAPS T-BILLS TAX TOTAL DEBT TRADE BALANCE TRADE BALANCES TRADE GROWTH TRADE SHOCKS TRADE SURPLUS TRADING TRANCHE TREASURY TREASURY BILLS TREASURY BONDS TREASURY YIELDS TREATIES UNEMPLOYMENT RATE UNEMPLOYMENT RATES WITHDRAWAL ZERO INVESTMENT
Online Access:	http://documents.worldbank.org/curated/en/2014/03/19357185/confidence-crisis-exposes-economic-weakness http://hdl.handle.net/10986/17793

Description
Summary:	Real Gross Domestic Product or GDP growth slowed to an estimated 1.3 percent in 2013 from 3.4 percent of 2012. In January 2013, we projected 3.6 percent growth for 2013, but while the global economy has continued to improve at a moderate pace, Russia's is struggling to find its footing. The first part of this report explores the recent economic developments that underlie this slowdown. To emerge from the downturn with improved long-term prospects Russia will need a combination of cyclical and structural policy measures. As the relative weight of the reasons for Russia's downturn is tilted toward structural factors, structural measures will need to lead the rebound. The lack of more comprehensive structural reforms in the past has led to a gradual erosion of investor confidence. This was masked by a growth model based on large investment projects, continued increases in public wages, and transfers, all fueled by sizeable oil revenues. Recent events around the Crimea have compounded the lingering confidence problem into a crisis of confidence and more clearly exposed the economic weakness of this growth model. Investor pessimism became the decisive factor affecting Russia's economic outlook, presented in part two of the report. The special focus note in part three discusses the link between Russia's growth in the past decade and how it fueled an unprecedented growth in household welfare.

Russia Economic Report, No. 31, March 2014 : Confidence Crisis Exposes Economic Weakness

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