Survey of Current Business (December 2018 – March 2019)

Sergey P. Aukutsionek – Head of Center for Transition Economy Studies, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Andrey S. Yegorov – Researcher of the Center for Transition Economy Studies, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Tatyana V. Serzhantova – Senior Researcher of the Center for Transition Economy Studies, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Stanislav V. Belyakov - Researcher of the Center for Transition Economy Studies, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

In December 2018 the share of enterprises that highly estimated their financial conditions turned out to be surprisingly large: adding 12 percentage points for a month, the share of well-to-do enterprises reached a record high level for all 25 years of measurements of this indicator and amounted to 94%. The diffusion index of output reached 58 points, showing a significant increase of 20 points.

The diffusion index of expected after three months changes in prices for manufactured products is growing three consecutive months and in December 2018 reached 81 points – its highest value since 2015. A similar price index for purchased products stopped at the level of 95 points, which also is a record high value for the last 4 years.

Key words: industry, industrial enterprises, price level, wages, employment, output, investment, indebtedness to banks, order-book level, stocks of finished products, capacity utilization rate, risk of bankruptcy, economic policy, crisis duration.

Russian Tomatoes Become More Competitive

Natalia I. Shagayda – Director of Center for Agro-Food Policy of the Russian Presidential Academy of National Economy and Public Administration; Head of Agricultural Policy Department of the Gaidar Institute, Doctor of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

In 2019, it has become apparent that the gap in prices of imported tomatoes and Russian ones is narrowing. However, Russian glass-grown tomatoes are still more expensive than the imported ones despite new projects, depreciation of the rouble and good output yield.

Key words: agriculture, agricultural organizations, agro industrial complex, tomatoes, open ground tomatoes, glass-grown tomatoes, crop productivity.

Regions’ Budgets: Best Results of the Decade

Alexander N. Deryugin – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration; Researcher of the Gaidar Institute. Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

In 2018, nominal and real revenues growth rates of regions’ and local budgets hit top indices since 2012. Simultaneously, curbing expenditure growth allowed for the first time in eleven years to ensure surplus of the consolidated budget in the amount of 0.5% of GDP. The number of Russian regions with surplus budget at the year-end hit an all-time high – 70. This allowed to markedly reduce the regions’ debt burden. At the same time, retention in 2019 similar growth rates of the budget revenues appears highly unlikely.

Key words: regional budgets, regional budget revenues, regional budget expenditures, regions’ public debt, public budget loans and bank loans.

Industrial Sector in February 2019 — Industrial Production

Sergey V. Tsukhlo – Head of Business Surveys Department of the Gaidar Institute, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Negative demand dynamics registered in early 2019 has not so far told on the output, estimates of finished products stocks and industrial enterprises forecasts. The industrial sector preserves optimism of expectations regarding demand, output and employment. However, the investment plans began being short of optimism gained in the previous months.

Key words: Russian industry, demand, output, employment, stocks of finished goods, crediting of manufacturing, investments, actual trends and expectations.

Socio-Economic Development in the Regions: 2018 Results

Natalia V. Zubarevich – Main Researcher of the Russian Presidential Academy of National Economy and Public Administration, Doctor of Geographic Sciences, Professor (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Against the background of a more sustainable growth of industrial production than a year ago investments contracted in more than 40% of the subjects of the Russian Federation and as before concentrate in the metropolitan agglomeration and oil and gas producing regions. Housing construction continued downward trend in more than half of the regions and household cash income was falling in nearly ¾ of territories. Notable revenue growth of regional budgets was due not only to the growth of tax revenues but to transfers up 22%. This fact leads to a decline by three-fold of the number of regions with budget deficits and a reduction of debt burden, although debt volume decreased only by 4%.

Key words: RF regions, socio-economic situation of regions, regional budgets.

Main Trends in the Oil Sector in 2018–2019

Yury N. Bobylev – Head of Mineral Sector Economics Department of the Gaidar Institute; Leading Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Amid raising global oil prices, crude oil production in Russia in 2018 hit an all-time high for the post-Soviet period. Under the first stage of tax maneuver in force in the oil industry, production and export of fuel oil moved down resulting in contraction of oil refining volumes but refining depth went up notably. Year 2019 saw the launch of the second stage of the tax maneuver in force in the oil industry and the tax on extra revenue was adopted.

Key words: oil, oil sector, oil prices, oil export, tax maneuver.

Assessment of the Households’ Inflationary Expectations

Diana A. Petrova – Researcher of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Pavel V. Trunin – Head of Center for Macroeconomics and Finance of the Gaidar Institute; Leading Researcher of the Russian Presidential Academy of National Economy and Public Administration, Doctor of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

The article provides data obtained from the survey conducted by RANEPA in order to assess the households’ inflationary expectations. Survey findings demonstrate that perceived inflation and the households’ inflationary expectations obtained by the RANEPA survey are close to the Bank of Russia estimates. In October 2018 the inflationary expectations of the population remained unchanged over next 12 months and remained at June 2018 level. This is due to stable gasoline prices and reduced prices on foodstuffs seen in July-September 2018. Meanwhile, inflationary risks in mid-term perspective remain high owing to weaker ruble and VAT increase.

Key words: inflationary expectations, perceived inflation, households’ survey by RANEPA, prices.

Federal Budget in 2018: Growth of Oil and Gas Revenues, Budget Surplus

Tatyana V. Tischenko – Senior Researcher of the Gaidar Institute; Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

In 2018, the federal budget revenues moved up by 2.4 percentage points of GDP against 2017 not least because of the oil and gas revenues which grew by 2.2 percentage points of GDP and the expenditures contracted by 1.7 percentage points of GDP compared to the previous year. The federal budget limitation due to the budgetary rules has ensured surplus in the amount of 2.7% of GDP.

Key words: federal budget, budget revenues, budget expenditures, budget surplus.

Retirement Age Increase: Demographic Facts

Victor Yu. Lyashok – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Growth in the share of the elderly people cannot but lead to a higher burden on the able-bodied population. In the meantime, families’ expenditures per child are increasing. In such a situation, it is inevitable either to increase insurance contributions or the retirement age.

Key words: pension age, pensions, demography, demographic burden of the population.

Decomposition of Russia’s Economic Growth Rates in 2018–2019

Sergey M. Drobyshevsky – Scientific Director of the Gaidar Institute; Head of Macroeconomic Research Department of the Russian Presidential Academy of National Economy and Public Administration, Doctor of Economic Sciences, Associate Professor (Moscow, Russia}. Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Pavel N. Pavlov – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

We have performed a decomposition of Russia’s GDP growth rates to assess the current state of the Russian economy. Basic production factors (labour, capital, total factor productivity) in 2018 contributed to the growth around 1.6 of a percentage point. Global crude oil prices posted a negative contribution of around -0.5 of a percentage point, while the business cycle and random shocks components altogether contributed around 1.2 of a percentage point. End-of-year growth for 2019 might stay at 1.7–2.0%, barring negative shocks.

Key words: Russian economy, GDP, decomposition of growth rates, total factor productivity, labor, capital.

Creating Compensation Funds: World Experience

Yury A. Danilov – Leading Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

The article discusses the patterns of formation of compensation funds in the modern world, primarily in countries with emerging financial markets. Based on a review of a number of country cases, it is shown that the most important features of compensation systems in countries with developing financial markets are: active indirect participation of the state in creating compensation funds and active participation of national stock exchanges in the formation of sources of compensation funds. It seems that these two characteristic features of the formation of compensation funds (compensation systems) in countries with developing financial markets are indispensable conditions for the success of compensation system projects in such countries.

Key words: compensation fund, compensation systems, investor protection, household savings, stimulating long-term investments, transaction costs, securities, Stock Exchange, retail investors.