Varsity-Packet-Final

Some analysts suggest the true number of billionaires

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ssia’s Reserve Fund suffering, the President told a press conference after the Russia-EU summit held close to St. Petersburg on Monday. "This year, we calculated the revenue part of the budget on the basis of $100/bbl, and the price was later increased to $115/bbl. Everything beyond $100/bbl will go to the reserve fund. That is, if the price is below $115/bbl we will have less revenue going to the reserve fund," he specified. 6|Page Russian Oil DA Affirmative BDL No Internal Link – Oil Decline Won’t Hurt Russia’s Economy [____] [____] High prices don’t transfer into the real economy Lidia Kelly , Reporter @ Reuters, 2011 (Russia's economy struggles for sustainable growth, May 18th, http://ibnlive.in.com/generalnewsfeed/news/russias-economy-struggles-for-sustainablegrowth/691643.html) Russia's economy is struggling to attain sustainable growth despite the surge in prices for its oil exports, data showed on Wednesday, pointing to another tough decision on official interest rates later this month. Industry output grew at its slowest rate in 18 months in April, while producer prices rose more than forecast and weekly consumer inflation, stuck at 0.1 percent, underlines the conflicting pressures on the central bank. Pledging to keep full-year inflation below 7.5 percent ahead of presidential elections in March 2012, the central bank is expected to continue tightening monetary policy -- but a sluggish economy will complicate its decision-making on how to control prices and manage rouble appreciation driven by high oil prices. Investors have been scrutini zing data for clues on the central bank's move after the regulator unexpectedly raised all key rates last month, including the benchmark refinancing rate. The latest data, including Monday's figures showing gross domestic product growing a weaker than expected 4.1 percent year-on-year despite surging oil prices, suggests that emerging Europe's largest economy is struggling. "We would have expected that given the high oil prices something of this would transfer to the real economy, but the big story is inflation, which is eating into the real income of consumers," said David Oxley, an emerging markets economist at Capital Economics in London. Crude has held above $100 per barrel for a third month in a row -- more than $30 above what had been initially assumed in the 2011 budget -- ensuring fresh cash inflows into the economy and propping up Russia's trade and current account surplus. The Economy Ministry said late last month that it was relying on industry to put the economy onto a sustainable path to 4.2 percent gross domestic product growth this year. "Manufacturing sectors of the industry will be the drivers of economic growth in 2011, with growth dynamics of 7.5 percent," the ministry said in a document describing economic scenarios. But while manufacturing grew 5.3 percent year-on-year in April, it was down 3.6 percent on the month, Wednesday's data from the Federal Statistics Service showed. Extraction of raw materials, including oil and gas, was also down on the month, after a period when rising crude prices encouraged production. "Industry in Russia strongly reacts to ch...
View Full Document

This document was uploaded on 02/06/2014.

Ask a homework question - tutors are online