The chief of the International Monetary Fund warned that a third of the world’s economy will be in recession by the year 2020

The Russian Economy: Is China Getting More Attention Than It Needs? Georgieva’s Comment on the Implications of Covid

The economic outlook for Russia is not good, according to Kristalina Georgieva, Managing Director of the International Monetary Fund.

It would feel like a recession for hundreds of millions of people if the world economy was in recession, she said.

China is expected to grow at or below global growth for the first time in 40 years. China would deliver 40% of global growth before Covid. She said it is a difficult period for Asian economies as it is not doing it anymore.

China’s economy was expected to have expanded at least 4.4% last year, a figure much stronger than many economists had predicted, but much lower than the 8.4% growth rate seen in 2021.

When I talk to Asian leaders, they always start with the question of what will happen with China. Is growth going to go up in China? she said.

China’s haphazard reopening has unleashed a wave of Covid cases that have overwhelmed the health care system, dampening consumption and production in the process.

The Russian Economy in the Light of Ukrainian War II: Oil and Gas Prices in the Era of Russian Recovery and Implications for the Future of the Middle East

Russia is cutting oil production this month, and that could lead to even harsher sanctions from the West. Russia’s economic prospects are dependent on the outcome of the conflict in Ukraine.

The remarks from the billionaire — who called for an end to Moscow’s war in Ukraine in the early days of the conflict last year — contrast with a more upbeat assessment of Russia’s economic fortunes by President Vladimir Putin last week. Putin praised the resilience of the country’s economy in the face of unprecedented Western sanctions imposed in the past year.

“The Russian economy and system of government have turned out to be much stronger than the West believed,” Putin said in a speech to Russia’s parliament Tuesday.

Over the next year, cracks will show and they will widen. The European Union — which spent more than $100 billion on Russian fossil fuels in 2021 — has made huge strides in phasing out purchases. The bloc banned most Russian crude oil imports by sea in December, after reducing its dependence on Russian natural gas. It enacted a similar block on refined oil products this month.

The era of windfall profits from the oil and gas market for Russia is over, according to Janis Kluge, an expert on Russia’s economy.

Meanwhile, the ruble has slumped to its weakest level against the US dollar since last April. The currency is weak which has led to high inflation. A recent survey shows that most businesses can’t imagine growth given high levels of economic uncertainty.

The Center for Strategic and International Studies hosted an event last month in which the former deputy minister of finance of Russia said that it was a question of natural resources. That meant the economy experienced a decline, but “not a collapse,” he added.

“This year what we reflect on is that Russia has managed to direct some of [its] oil sales beyond the markets of the European Union,” she said, referring to Russia’s success in rerouting crude shipments to China and India. The impact on the Russian economy will not be long-term.

New embargoes and price caps will make it difficult to find new buyers for processed oil products. China and India have their own network of refineries and prefer to buy crude, noted Ben McWilliams, an energy consultant at Bruegel.

Russian Economy and War: How Russian Companies Will Fail in 2020 and How to Plan for Its Implications for the Next 200 Million Years

Energy resources will be spent on military needs, said the acting director of the Russia Institute at King’s College London.

“Whether the economy shrinks or expands in 2023 will be determined by developments in the war,” Tatiana Orlova, an economist at Oxford Economics, wrote in a note to clients on Tuesday. Shortages of workers connected to military enlistment are a threat, she noted.

Sectors that rely on imports have been particularly vulnerable. Domestic car makers such as Avtovaz, which manufactures the iconic Ladas, have struggled with shortages of key components and materials.

Russia’s auto industry was already weakened after companies such as Volkswagen

            (VLKAF), Renault

            (RNLSY), Ford

            (F) and Nissan

            (NSANF) halted production and began to sell their local assets last year. Chinese firms have stepped up their presence, part of a broader trend. Even so, sales of new cars dropped 63% year-over-year in January, according to the Association of European Businesses.

Firms are not sure how to plan for the future. A survey of more than one thousand businesses in Russia found that almost half planned to keep production steady for the next two years and not thinking about growth. The group said this contributed to the risk of long-term stagnation of the Russian economy.

Given Putin’s ideological commitment to subsuming Ukraine, he’s unlikely to back down, according to Sharafutdinova at King’s College London. But his war chest “is likely, inevitably, to diminish,” she added.

Source: https://www.cnn.com/2023/02/22/business/russia-economy-ukraine-anniversary/index.html

Russian Economy in Light of Sharafutdinova’s Indicted Crime during the Cold War and the Implications for the International Monetary Fund

“In normal times, we might have said that the population would protest against that,” Sharafutdinova said. “But of course, these are not normal times.”

“There will be no money already next year, we need foreign investors,” he said at an economic conference in Siberia Thursday, according to comments reported by TASS, a Russian state-owned news agency.

The budget deficit of the Russian government in January was 22% higher than in the same month a year ago.

Foreign investors, especially from “friendly” countries, also have a big role to play, Deripaska said. He said that whether they come depends on whether Russia can create the right conditions and make its markets attractive.

But China has thrown the Kremlin an economic lifeline by buying Russian energy, replacing Western suppliers of machinery and base metals among other products, and providing an alternative to the US dollar.

Deripaska made his fortune in the aluminum business during the chaotic scramble for assets following the collapse of the Soviet Union. In 2018, he was sanctioned by the United States, which noted that the oligarch “does not separate himself from the Russian state.” He was indicted last year for violating US sanctions.

The International Monetary Fund has drawn criticism for forecasting that Russia will see stronger economic growth this year than either the United Kingdom or Germany, despite rising pressure from Western sanctions.

Even Russia’s own central bank, which extended emergency capital controls for another six months on Monday, has said gross domestic product might contract by 1% this year.

Why the IMF is being lied to about Putin and the EU: A Yale Management Professor’s View on Putin’s Propaganda

Jeffrey Sonnenfeld, a Yale management professor, wrote in Fortune magazine Monday that the “IMF has been asleep at the switch” and parroting propaganda from Russian President Vladimir Putin.

Sonnenfeld and two colleagues, Stephen Roach and Steven Tian, thought that it was naive to echo Putin’s own GDP forecasts.

A list of Western companies has been kept, since the invasion of Ukrainian, and Sonnenfeld wants them to leave Russia.

Georgieva said that Russia’s economy would suffer over time as workers left and access to technology was cut off, as sanctions hurt the energy industry.

The US and European economies have proven to be surprisingly resilient. She said the job markets are strong and Europe has taken swift action to limit reliance on Russian energy.

That won’t prevent a global slowdown, however, as central banks continue their campaigns to bring inflation down from the highest levels in decades. The world’s economic output is expected to increase by 2.9% in the coming years.

The Fed slowed the pace of rate hikes last month, but Powell indicated in testimony to Congress Tuesday that the central bank may need to turn hawkish again.