Russia Economic Report, No. 32, September 2014 : Policy Uncertainty Clouds Medium-Term Prospects

Russia Economic Report, No. 32, September 2014 : Policy Uncertainty Clouds Medium-Term Prospects

Russia's economy is stagnating. Seasonally adjusted growth for the first two quarters of 2014 was near zero. Consumer and business sentiments were already weak in 2013 due to lingering structural problems and contributed to the wait-and-see at...

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Bibliographic Details
Main Author:	World Bank
Format:	Economic & Sector Work
Language:	English en_US
Published:	Washington, DC 2014
Subjects:	ACCESS TO FINANCING ACCESS TO INTERNATIONAL FINANCIAL MARKETS AMOUNT OF LOANS ASSET BASE ASSET PORTFOLIO ASSETS BALANCE OF PAYMENTS BANKING SECTOR BANKING SYSTEM BASIS POINTS BOND BOND SPREADS BOND YIELDS BONDS BORROWING COSTS BUDGET DEFICIT BUDGET SURPLUS BUSINESS CONFIDENCE CAPACITY CONSTRAINTS CAPITAL ACCOUNT CAPITAL FLIGHT CAPITAL FLOWS CAPITAL FORMATION CAPITAL INFLOWS CAPITAL INVESTMENT CAPITAL OUTFLOW CAPITAL OUTFLOWS CAPITALIZATION CDS CENTRAL BANK COMMERCIAL BANKS COMPETITIVENESS CONSUMER CONFIDENCE CONSUMER DEMAND CONSUMER PRICE INDEX CONSUMPTION DECISIONS CONSUMPTION GROWTH CORE INFLATION CREDIT DEFAULT CREDIT DEFAULT SWAP CREDIT DEFAULT SWAPS CREDIT GROWTH CREDITORS CURRENCY CURRENCY BASKET CURRENCY DEPRECIATION CURRENCY MARKETS CURRENCY SWAPS CURRENT ACCOUNT CURRENT ACCOUNT BALANCE CURRENT ACCOUNT DEFICIT DEBT BURDEN DEBT BURDENS DEBT PAYMENTS DEBT RATING DEBT STOCK DEBTS DEPOSIT DEPOSIT INSURANCE DEPOSITORS DEPOSITS DEVELOPING COUNTRIES DEVELOPING COUNTRY DISPOSABLE INCOME DOMESTIC BORROWING DOMESTIC CREDIT DOMESTIC DEMAND ECONOMIC DEVELOPMENTS ECONOMIC EFFICIENCY ECONOMIC POLICIES ECONOMIC POLICY ECONOMIC SLOWDOWN EFFICIENT MARKETS EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET BONDS EQUIPMENT EURO ZONE EXCHANGE RATE EXCHANGE RATE DYNAMICS EXCHANGE RATE FLEXIBILITY EXPENDITURE EXPENDITURES EXPORT GROWTH EXPORT VOLUME EXTERNAL DEBT EXTERNAL FINANCING FEDERAL BUDGET FINANCIAL FLOWS FINANCIAL INTERMEDIATION FINANCIAL MARKETS FIXED CAPITAL FIXED INVESTMENT FLEXIBLE EXCHANGE RATE FLEXIBLE EXCHANGE RATE REGIME FLOATING EXCHANGE RATE FOREIGN CURRENCY FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN EXCHANGE MARKET FOREIGN INVESTMENT FOREIGN RESERVES GEOPOLITICAL TENSION GEOPOLITICAL TENSIONS GLOBAL BOND GLOBAL DEMAND GLOBAL TRADE GOVERNMENT BANKS GOVERNMENT BUDGET GOVERNMENT DEBT GOVERNMENT FINANCES GOVERNMENT SECURITIES GROSS CAPITAL FORMATION GROSS DOMESTIC PRODUCT GROWTH PERFORMANCE GROWTH RATES HIGH INFLATION HIGH-INCOME COUNTRIES HOUSEHOLD INCOME HUMAN CAPITAL HUMAN DEVELOPMENT IMPORT IMPORT DEMAND IMPORTS INCOME GROWTH INDEBTEDNESS INFLATION INFLATION EXPECTATION INFLATION TARGET INFLATION TARGETING INSTITUTIONAL CONSTRAINTS INTEREST PAYMENTS INTEREST RATES INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL MARKETS INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL MARKETS INTERNATIONAL RESERVES INVENTORIES INVESTMENT ACTIVITIES INVESTMENT CLIMATE INVESTMENT DECISIONS INVESTMENT DEMAND INVESTMENT FUND INVESTMENT INCOME INVESTMENT PROJECTS INVESTMENT VEHICLES INVESTOR CONFIDENCE INVESTOR DEMAND LABOR MARKET LABOR MARKETS LENDER LENDER OF LAST RESORT LIQUIDITY LIQUIDITY CONSTRAINTS LLC LONG-TERM INVESTMENT MACROECONOMIC STABILITY MACROECONOMIC STABILIZATION MARKET CONDITIONS MARKET SHARE MATURITY MONETARY CONDITIONS MONETARY POLICIES MONETARY POLICY MONEY MARKET NATIONAL CURRENCY NATURAL RESOURCE NATURAL RESOURCES NON-PERFORMING LOAN NON-PERFORMING LOANS NPL OIL DEMAND OIL EXPORTS OIL MARKETS OIL PRICE OIL PRICES OUTTURN PAYMENT DEFAULT PENSION PENSIONS POVERTY REDUCTION PRIVATE INVESTMENT PRIVATE INVESTORS PROFIT MARGINS PUBLIC DEBT PUBLIC FINANCES PUBLIC INVESTMENT PURCHASING POWER PURCHASING POWER PARITY REAL WAGE GROWTH RECESSION RESERVE RESERVE FUND RESERVES RETURN SECONDARY MARKET SETTLEMENT SHORT-TERM DEBT SLOWDOWN SOVEREIGN BONDS SPARE CAPACITY STABLE INFLATION STATE BANKS STOCK MARKET STOCK MARKET PRICES STOCKS STRUCTURAL PROBLEMS STRUCTURAL REFORM STRUCTURAL REFORMS TAX TAX HIKE TOTAL CREDIT TOTAL DEBT TRADE BALANCE TRADE GROWTH UNCERTAINTY UNEMPLOYMENT RATE UNEMPLOYMENT RATES WORLD TRADE
Online Access:	http://documents.worldbank.org/curated/en/2014/09/20272407/russia-economic-report-policy-uncertainty-clouds-medium-term-prospects http://hdl.handle.net/10986/20439

Description
Summary:	Russia's economy is stagnating. Seasonally adjusted growth for the first two quarters of 2014 was near zero. Consumer and business sentiments were already weak in 2013 due to lingering structural problems and contributed to the wait-and-see attitudes of households and companies. Heightened market volatility and policy uncertainty due to geopolitical tensions during the first half of this year exacerbated this confidence crisis. The Russian economy needed to internalize several rounds of sanctions, countersanctions and measures to stabilize the economy; this environment of higher risk lowered domestic demand. While the macroeconomic stabilization measures were timely and successful, medium term policy objectives are still being defined. This continued policy uncertainty about the economic course of the country is casting a shadow on Russia's medium-term prospects. Prospects for further poverty reduction and shared prosperity are limited. In the past, rising wages and pension transfers allowed Russia to reduce poverty significantly and to expand the ranks of the middle-class. Unless structural reforms to expand the economy s potential are pursued, low investment makes it less likely that plentiful well-paying jobs will be created. High inflation, moreover, will slow real income growth and hurt consumption growth, dimming the likelihood for further poverty reduction and limiting the ability of the bottom 40 percent of the population to share in prosperity.

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