MOSCOW (Reuters) – Russia will scale down its state support of the economy in 2021, eyeing rising costs on servicing burgeoning state debt in the fallout of its response to the COVID-19 pandemic and the collapse of oil prices, Finance Minister Anton Siluanov said.
Running out of options to bolster public finances, Russia has more than doubled its domestic borrowing in 2020, raised some taxes and increased state spending as it relaxed its budget rule that shields the economy from external shocks.
Russia’s extra state spending to support the economy this year reached 4.5% of gross domestic product and will shrink to 1% of GDP in 2021, Siluanov told reporters in comments cleared for publication on Tuesday.
Still, the state development bank VEB may buy into preferred shares of the state-run Russian Railways to provide the latter with the funds for its investment programme, Siluanov said.
Siluanov shrugged off the World Bank’s suggestions that Russian authorities can opt for a more gradual fiscal consolidation than currently planned.
“If we continued the same policy as this year, we would pull out the money from the economy… We can’t withdraw all the liquidity from the market and finance spending,” Siluanov said.
The finance ministry raised nearly 5.3 trillion roubles ($71.89 billion) by selling OFZ treasury bonds on the domestic market in 2020, with the bulk of bonds purchased by major banks which dented rouble liquidity levels in the interbank system.
Russia has to return to the budget rule in 2022, Siluanov said, referring to the budget system praised by the IMF and the World Bank.
“If so, then we can’t keep our spending high all the time,” Siluanov said.
“We carry out responsible policy unlike other countries that flood and will flood their economies with money.”
Russia’s debt-to-GDP ratio has already reached 20%, the level which the ministry did not want to exceed, and spending on servicing debt will rise to 1.4 trillion roubles in 2023 from up to 800 billion roubles this year.
Russia has no plans to raise taxes, Siluanov said, repeating the same line from the previous years that, however, did not prevent Russia in 2020 from hiking taxes on some sectors and on Russians earning more than around $67,800 a year.
Global oil prices recovery will help Russia to post a budget deficit of 3.9% of GDP in 2020, less than the 4.4% predicted earlier, Siluanov said.
($1 = 73.7268 roubles)
(Reporting by Darya Korsunskaya; Writing by Andrey Ostroukh; Editing by Chizu Nomiyama)
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
