The Russian economy is uncompetitive, and has no more reserves for growth

[DARPA]

The profit of Russian banks for the year decreased to fifteen times. The aggregate profit of the sector in the first half of 2015 amounted to 34 billion rubles - 513 billion against the same period last year. This occurs at high nominal interest rates on loans, and points out that an increasing number of bank defaults. In particular this applies to consumer lending, which expanded in recent years with the growth of living standards in the country. However, an important role is played here as defaults on loans of working capital of enterprises. For the first time in recent years in Russia was not only a drop in investment in fixed assets, ie the purchase of long-term assets, but also the fall in investment in working capital.

The latter circumstance indicates that entrepreneurs are negative assessments of the situation not only in the long term, but also fold the current production. A related sharp rise in inflation: even according to official Ministry of Economic Development, it will be significantly higher than in 2014, when it amounted to 11.4%. We are dealing not only with monetary inflation, depending on the cost, but also with the reduced supply. This is a new factor, which now must take into account.

For comparison, in the crisis of 1998 a greater impact on the economy were external factors, such as the movement of capital and price changes. Therefore, the economy could quickly start the recovery growth: we have underutilized production capacity and high real unemployment. Today the situation is completely different: we have the old fixed assets, it is sufficiently loaded, and unemployment is relatively low. Accordingly, even the current depreciation of the exchange rate does not lead to incentives for economic growth.

In the latter half of the external situation is also unfavorable for the Russian economy. There is a drop in the value of exports and the value of imports: the influx of dollars into the country decreased. Capital outflows exceeded the trade surplus. From this it follows that we must prepare for further deterioration of the macroeconomic situation.

Plan of the federal budget for the current three years has been revised in the spring of this year, under the price of oil at $ 50 a barrel, which led to the planned reduction in revenues of 2 trillion rubles. This contrasts with the current situation of crisis of 2008-2009 .: budgetary system now can not act a stimulus for growth in demand. The same applies to features of the Reserve Fund, which is in a situation of 2008-2009. It was incomparably greater, and could spend, stimulating recovery from the crisis.

These market factors that determine the current crisis. Long-term factors related to the imbalances accumulated in our economy. In particular, with undeveloped private sector as a result of state-owned corporations, which pulled the resources and, to put it mildly, is not always effective consumption. This also adds a high degree of centralization of public finances, which are due to the fall in oil prices also affected.

The state policy in the field of employment is to arrest unemployment and motivate employers not to fire people. At the same real income, of course, will be reduced, inflation to rise and the real exchange rate to fall (though may try to keep the nominal). Millions of Russians have to face declining living standards. And the source of this - in the low competitiveness of the Russian economy. If you look at the BRICS countries, we are still ahead of most of them in terms of income per capita. But to reach the living standards of poor countries, even in Western Europe, for example, Portugal, we, while maintaining the current situation, has not come out. Russia on these indicators can now compete only with Greece, whose economy is reeling.

Andrei Vorobyov
Candidate of Economic Sciences (St. Petersburg)