Saturday, September 17, 2016

Is Russia Running Out Of Money?

CNN: Russia is seriously running out of cash

Russia is bleeding cash at an alarming rate.

After almost two years in recession, the country's rainy day fund has shrunk to just $32.2 billion this month, according to the Russian Finance Ministry. It was $91.7 billion in September 2014, just before oil prices started to collapse.

And it's getting worse. Analysts expect the fund will shrink to just $15 billion by the end of this year and dry up completely soon after that.

"At the current rate, the fund would be depleted in mid-2017, perhaps a few months later," Ondrej Schneider, chief economist at the Institute of International Finance, wrote in a note this week.

The government's reserve fund is designed to cover shortfalls in the national budget at times of low oil and gas revenues.

Read more ....

WNU Editor: It is not a problem now .... nor will it be a problem next year .... but after that (i.e. in 2018) .... I am telling family and friends in Russia to expect higher taxes. There is also the route of Russia borrowing money on the international markets .... but on this issue I have to give credit to Putin .... he hates debt.

On a side note .... the above Al Jazeera video is a story on how small businesses are booming in Russia despite the economic woes. I can vouch its authenticity. On my last trip there .... I was surprised to see how vibrant and important small business have become in my mother's home town 50 kilometres west of Moscow .... there were everywhere and people were busy.

1 comment:

RRH said...

They can't be that broke...