Russia Letter – Moscow week beginning May 16
Russia’s budget deficit
After a 10-day holiday, Russian markets returned with some fresh developments last week.
Among the most important announcements was the country’s budget deficit figure. According to data released by the country’s Ministry of Economic Development, Russia’s budget deficit in the first quarter of 2016 amounted to 1.2 trillion rubles (about $18 billion).
Meanwhile, in another announcement by the ministry, it revealed the country’s trade surplus in the first quarter of 2016 decreased by 47 percent to $25.6 billion, compared to the year before.
Due to the drop in oil prices, Russia’s economy has suffered losses. The country’s GDP dropped by 3.7 percent last year.
Russia’s loss because of sanctions
A report called entitled “The Crimea and the Punishment: the impact of sanctions on the Russian and European economies,“ published by the German Institute for Economic Research DIW, revealed that because of sanctions imposed on Russia by the West due to its activities in Ukraine, the Russian economy is losing a GDP growth of 2 percent every quarter.
According to the research, since the start of the sanctions in the second quarter of 2014 to the third quarter of 2015, the Russian economy shrank by 4.1 percent whereas if sanctions were not imposed, growth would be expected at 6.9 percent.
The report also indicated that the euro zone countries’ losses due to the sanctions against Russia were “negligible.”
Russia planning to ban all Turkish fruits
Finally, Russia’s Federal Service for Veterinary and Phytosanitary Surveillance (Rosselhoznadzor), announced that they were planning to ban all fruit and vegetable imports from Turkey as of May 19.
According to the statement, the decision was taken due to concerns that fruits and vegetables imported from Turkey were not at a required standard for human health.