Russia's Economy Has Shrunk For The First Time In Five Years.

Russian government data released on the 29 day show that in November, Russia's gross domestic product (GDP) fell by 0.5% over the same period last year, the first time the Russian economy has shrunk since 2009. On the same day, the Russian currency ruble depreciated by 7%, ending the 5 consecutive trading days before the rally.

Russia's economy is slipping to the brink of recession under the three heavy shocks of oil price and Western sanctions and the ruble crisis. Analysts pointed out that how to make the economy out of difficulties will be the core task of the Russian government in the coming period.

Since June of this year, global crude oil prices have fallen by about 50%, and remain at less than US $60 per barrel. Western sanctions have added to the Russian economy, with more than 100 billion dollars of money flowing out of Russia.

Ulyukaev, Russia's minister of economic development, said recently that if oil prices remained at around $60 a barrel, and the West continued to impose sanctions on Russia, the Russian economy would shrink by 3% in 2015, and it would not be able to resume growth until 2016.

In addition, some international agencies also believe that Russia's economic growth prospects are not optimistic next year. Moodie, the international rating agency, expects Russia's economy to shrink by 5.5% in 2015 and 3% in 2016. JP Morgan expects Russia's economy to shrink by 0.8% to 3.3% in 2015.

　　 Russia C Koleva, a researcher at Ali Parry Analysis Center, pointed out that the main reason for the decline of the Russian economy is the lack of capital, the lack of investment and the expansion of production. After the outbreak of the international financial crisis in 2008, the Russian government was able to get loans from foreign financial institutions to deal with the crisis, and now sanctions are affecting Russia from the West. financing channel Hindered, the financing ability of Russian enterprises is limited, without funds to expand production, economic development has lost momentum.

While the economy is down, inflation pressure is rising in Russia, and the Russian government expects inflation to exceed 10% in the future. Vorster Rico J, chairman of the Russian enterprise alliance, said that after the new year, there will be obvious price increases in the Russian market, especially the rise in the prices of basic consumer goods.

Rising prices will increase the living burden of the Russian people. The Russian government has promised to raise wages and pensions for residents in 2015. But analysts believe that the downward pressure on the economy will force the Russian government to cut its fiscal expenditure in 2015, which will naturally affect the increase in wages and pensions.

In addition, as from the West Financial institution Financing channels are limited, and Russian enterprises have made loan requests to domestic banks and other financial institutions. Therefore, for the Russian government, financial stability is directly related to economic stability.

Russia's central bank announced on the 22 day that it would rectify its state-owned bank and designate the Russian bank deposit insurance agency to temporarily trust the bank business to avoid the bank's bankruptcy. In addition, the Russian bank deposit insurance bureau will receive 30 billion roubles (about 500 million US dollars) from the Russian central bank to ensure that the state owned bank has solvency. This is Russia's first bank to rescue in the current ruble crisis.

As the latest measure to deal with the crisis, Russian President Putin signed a decree 29 days, raising the deposit insurance indemnity of Russian citizens from 700 thousand roubles (about 12 thousand and 500 US dollars) to 1 million 400 thousand roubles (about 25 thousand US dollars). This is the first time Russia has increased deposit insurance compensation since 2008.

On the same day, Russian Prime Minister Medvedev approved the transfer of the government loan bonds totaling 1 trillion roubles (US $17 billion 900 million) to the Russian deposit insurance bureau to replenish Russian banking system capital and protect depositors' interests.

Analysts pointed out that Russia's increase in deposit insurance compensation and financing to help banks is to maintain the stability of the Russian financial system, which will be the most important part of the Russian government's economic stability in the future.