Economy

Russia's economy facing worst contraction since 1994 – Financial Post

Published

2 years ago

May 10, 2022

Harry Miller

Gross domestic product is likely to shrink as much as 12 per cent this year, internal forecast says

Bloomberg News

A couple embrace in Moscow, in April. Photo by Natalia Kolesnikova/AFP via Getty Images

Russia is facing the deepest economic contraction in nearly three decades as pressure from sanctions imposed by the U.S. and its allies mounts, according to an internal forecast by the Finance Ministry.

Gross domestic product is likely to shrink as much as 12 per cent this year, deeper than the eight per cent decline expected by the Economy Ministry, according to people familiar with the estimates who spoke on condition of anonymity to discuss internal deliberations. The government hasn’t released a public forecast since the invasion of Ukraine.

The Finance Ministry issued a statement Tuesday saying the report of the forecast was inaccurate. “Preparation of official macroeconomic forecasts does not fall under the Finance Ministry’s authority,” it said, noting that it “expects that the measures taken by the government and the Bank of Russia will make it possible to ease to a large extent the negative consequences of sanctions and ensure stable economic development.”

A 12 per cent contraction would put the economic pain on par with the turmoil seen in the early 1990s, when Russia’s Soviet-era economy lurched toward capitalism with a contraction not seen since wartime.

“The main negatives are the oil embargo, the EU giving up Russian gas, along with more departures among foreign companies,” said Natalia Lavrova, chief economist at BCS Financial Group in Moscow. “All that will probably expand gradually, with a lot of negative carrying over in to 2023.”

Excluding those factors and based only on current sanctions, she forecasts a contraction of 10.8 per cent in 2022 and about 5 per cent in 2023.

The Bank of Russia said April 29 it expects a contraction between eight per cent and 10 per cent this year. The International Monetary Fund forecast one of 8.5 per cent, while a Bloomberg survey of economists found a median decline of 10.3 per cent.

If the Finance Ministry’s forecast proves accurate, that would erase about a decade of economic growth, according to one person familiar with the forecasts.

Uncertainty about the outlook remains very high as the war continues and the U.S. and its allies discuss further sanctions, including on key exports like oil, the people said.

The press service at the Economy Ministry didn’t respond to a request for comment.

Bloomberg.com

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Economy

S&P/TSX composite gains almost 100 points, U.S. stock markets also higher

Published

1 day ago

September 13, 2024

Anne Joseph

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.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

Statistics Canada reports wholesale sales higher in July

Published

1 day ago

September 13, 2024

Anne Joseph

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.

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Economy

S&P/TSX composite up more than 150 points, U.S. stock markets mixed

Published

2 days ago

September 12, 2024

Anne Joseph

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.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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