27 May 2009 | Russia Economic Scan

27-May-2009

Russia Economic Scan

In this edition: Russian economic slide worsens, Putin urges innovation to revive Russia, Russia to buy $10 bln IMF bonds, Russian banks restructured 20% of their loan portfolios, Russian stocks surge on Wednesday.

Top headlines

Russian economic slide worsening

• Russia's economy contracted sharply in April - shrinking by 10.5% from the same month a year ago - Deputy Economy Minister Andrei Klepach has said.
• The data came as officials were quoted as saying Russia would have a budget deficit equivalent to 9% of GDP in 2009, from an earlier 7.4% prediction. (BBC News)

Putin urges innovation to revive Russia

• Russia must focus on technology and innovation to modernize its economy or risk falling behind other world powers, Prime Minister Vladimir Putin said on Wednesday. "We need to move forward, to put the economy on an innovative track," Putin told an audience of business people in Moscow.
• He argued that Russia had "serious competitive advantages" in sectors like space, saying that the country could increase its share of commercial space launches from 40% to around 50%. (AFP)

Russia to Buy $10 Billion of IMF Bonds a Decade After Default

• Russia plans to buy $10 billion of International Monetary Fund bonds to help fellow member states weather the global financial crisis, a decade after the country defaulted on its own ruble debt.
• Russia joins the other so-called BRIC countries, Brazil India and China, in expressing interest in purchasing the IMF bonds as an alternative way to contribute to the Washington- based fund. At the same time, Russia plans to borrow billions of dollars from the World Bank next year to cover a budget shortfall caused by lower oil prices and collapsing tax revenue. (Bloomberg)

Russian Banks Restructured 20% of Loan Portfolios

• Russian banks restructured an estimated 20% of their loan portfolios as of April 1, the central bank’s head of banking regulation and supervision said.
• “Banks are indeed restructuring credits more actively now,” Alexei Simanovsky told reporters in St. Petersburg today at the start of a banking conference. “The question is whether they are doing this in good faith.” (Bloomberg)

Russia Stocks Rise as Oil Tops $63; Rosneft, Novatek Lead Rally

• The 30-stock Micex Index added +1.8% to 1,059.60. The RTS Index advanced +4.1% to 1,030.79. The Russian Depositary Index, measure of global depositary receipts trading in London, rose +3.6%.
• OAO Rosneft, Russia’s biggest oil producer, climbed +3.7% to 190.72 rubles on the Micex Stock Exchange. OAO Tatneft , the oil producer in Russia’s republic of Tatartstan, gained +3.1% to 129.08 rubles. OAO Gazprom, the nation’s largest natural-gas producer, gained +1.1% to 171.71 rubles. Novatek, Russia’s second-largest gas producer, climbed +5.6% to 128.32 rubles, the third-steepest gain in the Micex Index today. (Bloomberg)

Source: Russia Economic Scan