Russia with the same new president and his economic challenges

Moscow, Kremlin (BRJ INC., CC BY-NC-ND)

Baltic States: more than 70 procurements around Rail Baltica in 2018

Serbian GDP grew 4.2 per cent y/y in January 2018

Russia

Vladimir Putin won Russian presidential election held on March 19th. Mr. Putin got 74 per cent vote and he will soon start his fourth term as president. He will stay in his office till 2024.

At the end of February 2018 the Financial Times listed the main challenges Mr. Putin will face in the following six years. Many of them relate to the economy and to the way that ordinary people live their everyday life in the country. “Despite the president’s high support ratings, ordinary Russians are anything but satisfied with their lives and pro-market economists are urging drastic reforms,” the FT.com comments.

Mr. Putin will have to cope with the following problems:

  • The price for crude oil which dropped dramatically from USD108 in September 2013 to USD30 in February 2016;
  • The country’s oil dependency, which needs to be reduced to allow Russia to improve its fiscal balance;
  • The low value of RUB – FT reminds that the “funding of Russian companies, banks and cabinet was undermined by Western sanctions in response to the annexation of Crimea.” The newspaper points out that the economy comes out of recession stronger and more stable than before – Russian banks reduced their dependence on foreign debt;
  • Keeping the inflation rate down, which is 2.18 per cent;
  • Declining real household income and the increase of a poverty rate (more than 14 per cent);
  • Weak economic growth after “the economy went into contraction for almost 2 years”. The World Bank expects 1.7 per cent of GDP growth in 2018 and 1.8 per cent in 2019, which is still more than 1 percentage point below the global average.

There are many “social issues” to be solved. Among the problems are low spending on education and the challenges of longevity (the retirement age must go up, now it’s 55 for women and 60 for men).

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Baltic States

“72 procurements are planned to be announced this year as part of the Rail Baltica fast train project in the Baltic states,” the Baltic Course informs after RB Rail, the pan-Baltic joint venture for implementation of the project. They are to be discussed in detail during Rail Baltica Global Forum 2018 that will take place on April in Tallinn, Estonia.

The portal reminds that RB Rail is a joint venture “set up by Latvia, Estonia and Lithuania to act as the central coordinator for the Rail Baltica project for the construction of a new fast conventional railway line from Tallinn to the Lithuanian-Polish border. The goal is to create a connection with other European countries.” The local project’s implementing bodies are Rail Baltic Estonia, Eiropas Dzelzcela Linijas, and Rail Baltica Statyba.

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Serbia

Serbia’s economic growth accelerates. The government focuses on boosting the economy and lowering central government debt. The See News Corporate Wire reports that GDP was up 4.2 per cent y/y in January 2018. This is due to the positive economic trends since the beginning of the year, according to the Prime Minister Ana Brnabic.

As reported, Serbian cabinet expects the country’s economic growth will accelerate to 3.5 per cent in 2018 (in 2017 it was 1.9 per cent). The government debt is also expected to decrease – from 57 per cent of the projected 2018 GDP to 45 per cent.

The portal also informs that in January 2018 Serbia’s budget showed a surplus of EUR152.2m.

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What’s up in indexes

Friday, March 16th was a non-trading day at Bucharest Stock Exchange. BET (of Bucharest) closed at 8,687.83 index points Thursday, March 15th

BUX (of Budapest) closed at 38,891.24 index points Wednesday, March 14th. It’s up 19.17 per cent y/y.

CROBEX (of Zagreb) decreased from 1,843.40 index points Thursday, March 15th to 1,843.11 index points Friday, March 16th. It’s down 0.02 per cent d/d and down 13.23 per cent y/y.

OMXR (of Riga) decreased from 1,035.51 index points Thursday, March 15th to 1,029.80 index points Friday, March 16th. It’s down 0.55 per cent d/d and up 32.63 per cent y/y.

OMXT (of Tallinn) decreased from 1,309.14 index points Thursday, March 15th to 1,307.58 index points Friday, March 16th. It’s down 0.12 per cent d/d and up 16.93 per cent y/y.

OMXV (of Vilnius) decreased from 686.27 index points Thursday, March 15th to 686.19 index points Friday, March 16th. It’s down 0.01 per cent d/d and up 21.93 per cent y/y.

PX (of Prague) increased from 1,115.36 index points Thursday, March 15th to 1,118.52 index points Friday, March 16th. It’s up 0.28 per cent d/d and up 14.04 per cent y/y.

SAX (of Bratislava) increased from 335.03 index points Thursday, March 15th to 337.46 index points Friday, March 16th. It’s up 0.73 per cent d/d and up 10.94 per cent y/y.

SOFIX (of Sofia) increased from 679.21 index points Thursday, March 15th to 679.98 index points Friday, March 16th. It’s up 0.11 per cent d/d and up 8.92 per cent y/y.

UX (of Kyiv) increased from 1,576.35 index points Thursday, March 15th to 1,629.56 index points Friday, March 16th. It’s up 3.38 per cent d/d and up 74.21 per cent y/y.

WIG20 (of Warsaw) decreased from 2,321.87 index points Thursday, March 15th to 2,285.08 index points Friday, March 16th. It’s down 1.58 per cent d/d and up 0.06 per cent y/y.

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