The Russian government faces a heavy task. The budget for this year has to be reviewed. Due to the low oil price, the income, which makes up around half of the budget, is under pressure. Departments have already been asked to save 10 percent. According to an American economist Russia is making insufficient use of the advantages of a low value rouble. The cheap rouble could stimulate export, but this isn't being done enough. Kyrgyzstan and Uzbekistan exported more fruits and vegetables to Russia. Both countries see a lot of potential in this market. The Ukraine is complaining that Russia is blocking transit to Kazakhstan, whilst that transport isn't included in the boycott.
The Russian government has to review the budget for this year and adjust it according to the "new reality". This was said by minister of Finance Anton Siluanov on Wednesday. The ministry's income depends on oil for half of its income. For the current spending pattern, an oil price of 82 dollars per barrel is needed, but the oil price is swinging around 30 dollars per barrel. The budget for this year takes into account an oil price of 50 dollars per barrel and a government shortage of three percent. The budget will have to be remade, based on an oil price around 40 dollars per barrel, the minister is advocating. "It is our job to adjust the budgets to the new reality," the minister said to Reuters. "A lot of decisions have to be made when it comes to budget policy." The minister also warned that a crash like that of 1998-1999 is looming. The various ministries have already been asked to save 10 percent, which should produce 500 billion roubles (6.5 billion dollars).
The Ministry of Energy also reports that a record amount of gas was supplied to the EU, with Germany as the largest buyer. Around 45 billion cubic metres of gas were supplied. The Ministry expects the gas supplying to increase further.
Russia profiting insufficiently from fall of rouble
According to economist Soumaya Keynes, who works for The Economist's Big Mac Index, Russia hasn't completely profited from the devaluation of the rouble. Whereas the weaker position of the coin is slowing import, it can encourage export. According to the 2016 Big Mac Index that The Economist recently published, the rouble is 69 percent undervalued compared to the dollar. This weak position should give the manufacturing industry a competitive advantage on the international market on the middle to long term. The low export and a lack of educated and mobile employees is slowing the Russian economy.
Russia profiting insufficiently from fall of rouble
According to economist Soumaya Keynes, who works for The Economist's Big Mac Index, Russia hasn't completely profited from the devaluation of the rouble. Whereas the weaker position of the coin is slowing import, it can encourage export. According to the 2016 Big Mac Index that The Economist recently published, the rouble is 69 percent undervalued compared to the dollar. This weak position should give the manufacturing industry a competitive advantage on the international market on the middle to long term. The low export and a lack of educated and mobile employees is slowing the Russian economy.
Kyrgyzstan exports more to Russia
Last year the export of fruit and vegetables to Russia from Kyrgyzstan increased by 68 percent. This made the export value 2.2 million dollars worth of vegetables and tubers. This product group is worth 7.14 percent of the Kyrgyzstan export.
Uzbekistan sees export rise
Uzbekistan saw the export of fruits and vegetables to Russia rise. The export of fruit and vegetables was 78.4 percent higher. Russia is worth 25 percent of the Uzbek export. Between January and September last year 29.2 percent less was traded between the countries, totalling an amount of 2.14 billion dollars.
Russian importers look for Turkey alternatives
According to Fruit-Inform Russian importers are looking for new suppliers to replace the Turkish products. The importers hope to succeed in this by increasing the import from China, Egypt, Morocco, Iran and Abkhazia. Importers are positive about the possibility of replacing the products. Price increases are being ruled out. There may also be importers who have stopped the lemon import from Turkey, even though this product is not on the boycott list.
The Ukraine looks for new Kazakhstan route
The Ukrainian authorities are looking for a new route to Kazakhstan. Although transit is permitted through Belarus and Russia despite the boycott, Ukrainian trucks are said to be getting stopped at the border. Kiev calls this opposition "undefined, unfair and discriminatory". They are therefore looking for another route to Kazakhstan.
The Ukrainian authorities are looking for a new route to Kazakhstan. Although transit is permitted through Belarus and Russia despite the boycott, Ukrainian trucks are said to be getting stopped at the border. Kiev calls this opposition "undefined, unfair and discriminatory". They are therefore looking for another route to Kazakhstan.