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Well, it was kind of a sidepoint that the US Federal government spending is higher than Russian, not even including the equally gigantic US state spending and others, which would suggest that at this point Russia is more capitalist than the United States.
Makes sense I guess, but that was already evident last fall with the bailouts and such.
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July 1 (Bloomberg) -- Russia’s economy “has reached or is rapidly approaching its turning point” after a gauge of industrial production shrank at the slowest pace since September, according to Goldman Sachs Group Inc.
“We expect gross domestic product to return to growth in the second half, thanks to a jump in fiscal spending and an ongoing easing of lending conditions,” Rory MacFarquhar, a Moscow-based economist at Goldman, said in a note e-mailed today.
VTB Capital’s Purchasing Managers’ Index climbed to 47.3 in June from 45.3 in the previous month, Moscow-based bank said today. The government has allocated 2.51 trillion rubles ($81 billion) in stimulus spending this year on loans, state aid and subsidies to battle the slump.
The economy contracted 10.2 percent in the first five months of the year and industrial production slumped a record 17.1 percent in May.
Goldman Sachs, which expects Russia’s gross domestic product to contract an annual 7.5 percent in 2009, reiterated its prediction for a 3 percent growth next year as the recovery in oil prices boosts liquidity and helps the government to finance its spending program.
SourceLike I said, light at the end of the tunnel. If GDP growth returns in the third quarter that would put it in a good position to make a full recovery by end-2010. But on the other hand, the rest of Eastern Europe isn't faring so..uh..less bad.
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July 1 (Bloomberg) -- Hungary, Latvia, Romania and Ukraine lead at least eight East European countries that may default on their debts after years of “gorging on cheap credit,” according to Royal Bank of Scotland Plc.
East European nations have received more than $90 billion in international aid since September to cope with the global financial crisis and avoid defaults. Latvia and Ukraine appear the most vulnerable, according to an International Monetary Fund model applied by the bank.
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The most compelling single indicator for a potential sovereign debt crisis is the ratio of external debt to gross domestic product, they wrote. Latvia tops the list at 148 percent, while Hungary follows at 139 percent.
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A “surprising” member of the at risk category for 2009 is Poland, “reflecting its relatively high external financing requirements and modest FX reserve coverage,” the analysts wrote. Its ratio of external debt to gross domestic product is 62 percent.
Some of the biggest emerging markets, Russia, Turkey, the Czech Republic, and South Africa are not identified as risky, according to the report. “All four economies suffered heavy market correction after the collapse of Lehman Brothers Holdings Inc, but stabilized subsequently,” it said. Lehman Brothers collapsed in September.
No major emerging countries in Asia and Latin America appear vulnerable to a sovereign debt crisis as these regions have current-account surpluses and “relatively light” external debt burdens, the analysts wrote.
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Posted: Mon 29 Jun 2009, 14:16
