Are we in danger of default? Default in Russia - what awaits us in the near future? Tougher sanctions on the banking sector

Taking into account the situation that has developed in the Russian economy, more and more residents are wondering whether there will be a default in Russia in 2019. It is not only the sanctions imposed by Western countries that prompt such thoughts.

The population is waiting for a default for a number of reasons: continuing to decline in oil prices, rising inflation, as well as the ongoing military conflict near the Russian borders. And no sane person can take it easy. People are pinning their hopes on the country's leadership, expecting that it will have enough experience to prevent another default.

If you turn to economics textbooks, you can find out from them what factors contributed to the past default. And if we compare them with the current situation in the country, we can understand whether a default is possible in Russia in 2019.

Significant difference between current and planned income. When calculating the Russian budget for 2019, the oil price of $41.6 was included in it. But after the decline in the quotes of "black gold" there was a decrease in income. This led to a deficit in the budget, which forced the authorities to reduce planned spending. This was the only right decision, because otherwise the country would have been forced to default.
Reduction in income caused by insufficient tax revenue and falling prices for exported goods.
Economic crisis.
Leapfrog in leadership positions, as well as abrupt changes in the political course.
Force Majeure.

Given these factors, it is not yet possible to say for sure whether Russia is in danger of default. One can see the attempts of the authorities to prevent a new default. But if you rely on the opinion of experts, then such an outcome is unlikely.

Will there be a default?

The current situation in the country once again confirms that the level of well-being of the population has declined. And as a result economic crisis not only ordinary citizens, but also small businesses suffered. The current situation is such that many people have been laid off, and this happened not only because of sanctions, but also difficulties at the enterprises themselves, which could not properly manage loans and reorganize in the light of new events.

The situation was aggravated not only by the decrease in the incomes of the country's residents, but also by the growth of inflation.

The position of the ruble does not inspire hope for an improvement in the situation, the exchange rate of which may fall against the dollar and the euro after the extension and introduction of new economic sanctions.

Observing all this, ordinary residents are increasingly thinking that a default in Russia in 2019 is possible.

Preconditions for a default

Specialists Central Bank, as well as financial experts do not expect that life in the country will be able to normalize in the coming year. Until the sanctions are lifted and the political situation with the neighbors stabilizes, there can be no talk of normalizing life in the country. Therefore, it is impossible to say unequivocally whether a default awaits Russia.

As a result of the imposition of sanctions, most of the domestic banks have suffered, which do not receive enough financial support from the side of the state. Because of this, they do not have the opportunity to continue cooperation with European financial institutions.

And finding themselves in a similar situation, they have to make a decision to temporarily suspend cooperation with international structures or completely stop.

According to experts, the search for new partners in the Asian market can be a way out in such a situation. And to date, active attempts are visible to establish relations with Asian banking institutions.

The main consequence of the default for Russia will be a significant reduction in gold and foreign exchange reserves. And this will lead to the fact that banks will provide loans on more stringent conditions. After all, when central bank has large reserves, it has the ability to provide more loans, and this makes it possible to soften the conditions for their issuance.

The positive side of default

Despite the fact that experts do not exclude the possibility of a default and call it an extremely negative phenomenon, it also has certain advantages, the essence of which is briefly as follows.

By being able to completely write off debts or delay their return, the country is released from obligations, which allows it to devote all its efforts to economic recovery. The creditor countries know about this, and therefore, in the hope of getting at least some money, they agree to write off a significant part of the debt to the bankrupt country or exempt it from paying interest.

1998 default

The last time in our country there was a default due to lack of money, and it was in 1998, the reason for it was the collapse of the USSR. Then National economy experienced not the best of times, but the lack of sufficient financial resources forced the leadership of our country to take large loans year after year. The default of 1998 in Russia contributed to the increase in public debt, and in 1998 it was already 50% of GDP.

emergence

The rapid recovery of the country's economy was hampered by a sharp decline in oil and gas prices, which just happened in 1998. Considering that at that time Russian economy completely dependent on these resources, her situation became even more deplorable.

The last straw that caused the 1998 default in Russia was the wrong policy of the country's leadership and the Central Bank.

After the default, when there was still little money, the economy began to recover, which naturally stimulated growth GDP level. This made it possible to gradually repay state debt. And when new people came to the government in 1999, our country was able to strengthen its position on the world stage.

Consequences

Many people remember that August 17, 1998 was the most terrible date of that period. Having assessed the situation, the country's leadership, namely the government, announced a default on foreign debts. Due to the lack of money, it was decided to devalue national currency and termination of service of certain obligations.

The default had an extremely negative impact on the national currency, the exchange rate of which fell by 4 times. If before the default the exchange rate of the national currency against the dollar was 6 rubles, then later it rose to 24 rubles.

The shocking forecast of Bank of America analysts, which is echoed by highly respected experts, concerns not only a new wave of the global financial and economic crisis, but also a Russian default. What are their conclusions based on, is it necessary to listen to their decision and again prepare for the most negative scenario? Turning out, however, again completely unprepared.

Bloomberg published the results of research by Bank of America analysts. Analysts draw attention to the fact that the existing stock exchange trends clearly indicate a high probability of a repeat of a crisis that is as devastating in terms of socio-economic consequences as the crisis that shook the financial and economic system of all countries in 1998.

This is eloquently indicated by the similarity of the dynamics of stock indices in that year and now. There is a reduction in the markets of developing countries, in particular the Russian one. And this continues against the backdrop of rising share prices, capitalization of companies in the high-tech sector. In addition, the US administration is pursuing a tough and consistent financial and economic policy, which resulted in the strengthening of the US currency by 25% over three years. And in the markets of developing countries, the decline did not stop.

Simply put, the authors of the report want to convey to the readers their vision of the situation: since investments in dollar instruments become the most profitable, it is logical for businessmen to withdraw funds invested in developing countries to their securities and invest in America. But one cannot ignore the fact that in the US, in particular - and in the sector of government bonds, there are also certain risks. Their reason is in the profitability of assets, so a collapse on the stock exchange cannot be ruled out.

According to experts in 1997, a very similar situation hung over the entire economy. Then the Thai baht devalued significantly, the rapid spread of the local, at first, crisis situation and to other countries. The climactic event was the announcement of default Russian government. The difference of today's situation lies only in the better position of the Asian markets, which, however, cannot be said about Russia.

How much to trust the data given in the publications - it is up to everyone to decide for themselves whether to listen to the conclusions of analysts or neglect them. By the way, the analytical review does not contain exact figures or calculations. In addition, we can talk about the speculative nature of such reports. After all, it will inevitably affect the abrupt change exchange rate any phrase, even if mentioned in passing, relating to a currency or country's GDP. We know the impact of similar reports not only on the mood of stock market sharks, but also on further movement or on the market reversal.

It should be noted that default in Russia has been expected for more than one year, the reason is the cyclical nature of the economy. And this year, the magic of numbers also plays its role, the significance of the year - it seems that 2018 is a continuation of 1998, 2008.

Who else mentioned the default?

Of course, the Bank of America report could have been ignored if other publications of significant companies and organizations that predict crises in the near future had not seen the light of day. This concerns not only the default of Russia, but in general economic problems global character.

World Bank experts talk about global recession

The World Bank published the report "Global Economic Prospects". It notes economic growth and the approach of 2019, when another global economic collapse is expected. There are too few chances for the economic situation to improve, and the risks of its deterioration are high. The main risk factor is the US scenario of protectionism and tightening monetary policy. In view of this, servicing the debt to the United States is becoming more and more difficult and costly for all countries.

George Soros, who made billions, spoke out about the global economic crisis

In a speech by well-known financier George Soros (end of May 2018, Paris), a warning was sounded about the threat of a major financial crisis to the world. This will cause the continued growth of the dollar and the rapid withdrawal of capital from developing countries. Inevitably, the negative impact on the economy from the fact that the nuclear deal with Iran is disrupted. Other shocks will also have an effect, including the devaluation of the national currencies of developing countries.

There is an opinion about the approaching global crisis among hedge fund financiers

Greg Coffey (formerly of Moore Capital Management) and Russell Clarke (Horseman Capital Management) have recently begun to warn clients of the approaching financial crisis. They agreed that the market situation is similar to that of 2008, so it is necessary to prepare for the crisis. True, they are very skeptical about this forecast - this trend plays into the hands of hedge funds, since their clients are just protecting themselves from a decline in the market.

Will there really be a default?

You can see from the media that talks about the default are conducted annually. It was also promised in 2013, which was relatively prosperous for Russia. Therefore, there is nothing surprising in the fact that now, when the ruble has collapsed, conversations have not only resumed, but have become louder and louder.

It is still premature to talk about a repeat of the Russian default of 1998, when the state acknowledged its inability to pay its external and internal debts. And for the population of the country, this turned into huge inflation and non-payment of salaries, the loss of all savings entrusted to banks.

It may happen that even if analysts' forecasts come true and another economic crisis begins, it will only affect Russia. We will have to feel the crisis - oil prices will collapse, the exchange rate of the ruble will obviously change. However, they talk about a better situation today - in comparison with 1998. In particular, about the exchange rate of the ruble, the costs of selling which replenish the reserves.

It is unlikely that anyone will undertake to reject the possibility of a default. It cannot be ruled out if the oil price is less than $35 per barrel, or if the US intends to freeze all of Russia's gold and foreign exchange reserves. Or the country will undergo a different economic, social shock. There are many options. However, it is most likely that the decline will worsen due to the ongoing recession. And the “background” is the growth of taxes, the withdrawal of business into the shadow sector, the impoverishment of the bulk of the population.

Based on materials from the site: grosh-blog.ru

Default - in legal relations this is a refusal to pay for the obligations assumed, and if we take into account the external obligations of the Russian Federation, then there are very, very few of them. More loans and debentures concern Russian banks and large companies.

First of all, it is worth taking apart what reasons can provoke non-payment of external debt across the country:

Incorrectly built country policy and economic strategy- the country is trying to boost the economy through external loans and, as a result, further aggravation of the situation.
A sharp change of power in the state and the rapid development of an economy that has gone into the shadows.
As the reason for the rapidly developing global crisis.

Given these reasons, many citizens of the country are wondering - what awaits the federation in 2018?

Economic forecasts regarding default in the Russian Federation have every reason for further development - the problem of financing and lack of money in some regions and sectors of the country's economy is particularly acute. As a domestic expert and HSE professor I. Nikolaev notes, such a position can only get worse in the near future.

Igor Nikolaev - Director of the Institute for Strategic Analysis of the audit and consulting company FBK and part-time professor high school economy

2018 is going to be a big year for Russian Federation- it's all about what reporting period all May decrees and resolutions of the Head of the Russian Federation must be fulfilled. In accordance with them, the income part of state employees will not only increase, but will also be equal to the average salary for each specific region.

Due to the implementation of these decrees at any cost, the problem of financing in the country may significantly worsen and prerequisites for a budget default may arise. Wouldn't this be too high a price to pay for the implementation of the election program?

But if we raise the question of a possible default in the Russian Federation, experts say quite confidently that such a scenario for the development of the country is unlikely. The authorities at the federal level, in accordance with forecasts, will not allow such a development of the situation, and even for the sole reason that elections were held the day before, and therefore I especially idealize such issues before and after them.

All finances to cover the needs of the budget in the funds of the Russian Federation will soon run out - according to forecasts, they will last until mid-summer, after which the funds will come from the National Welfare Fund. But if spending exceeds the levels set for the regions, the situation may reach the level of default, and the funding gap itself will persist for many more years.

What else do analysts predict?

Natalya Zubarevich, a regional expert, provides more accurate data and analytical compilations regarding the further development of events in the Russian Federation on the issue of a possible default. And she notes, based on the statistics of the financial situation by region - on this moment default cannot be although many domestic and foreign experts are talking about a default in the country, but within the framework of individual regions.

To date, many regions are faced with existing financial problems and they will have to be solved on a national scale, but not on a single region. This trend is due to the fact that regions and the state cannot exist separately, as well as their problems.

According to the latest operational data, the total debt for money for a variety of areas can be about 2 trillion in national currency.

Latest expert news

According to the Head of the Ministry of Economic Development, in 2018 the public should pay attention to the fact that the world is facing a new crisis period, the consequences of which will be almost impossible to prevent. There are reasons for this - this is a soft financial policy America in relation to the dollar and a significant decline in world GDP, a sharp slowdown in trade on the world stage.

Everything and every moment can provoke defo
lt on the world stage and in Russia in particular. Nevertheless, analysts advise not to worry about this issue - the default will indirectly help restore the level economic growth countries when all production processes are mobilized.

As noted in their research results, Standard Poor's center- debt in the regions will cross the bar of 900 billion in national currency.

Also throughout the year service rates will be increased by 1.5 times and as a result, the weakest in financially regions of the Russian Federation without additional material support may face the issue of default.

Experts also note that similar economic forecasts were put forward in 2008-09, and now, after such a period of time, the prerequisites for an economic collapse in the country and the inability to pay debts have again arisen.

For statistics, it is enough to remember that for the current reporting period, incomes amount to 1%, despite the fact that spending within the country increased by an average of 6-7%, and about external indicators, statistics speak of 10-15%.

Experts say that one of the main reasons for the deterioration of the economic situation is the implementation of presidential decrees, signed in May, which concerned raise wages employees in the field of education, health and culture. From 2013 to 2015, 1.6-1.7 trillion rubles had to be allocated from the Russian budget.

For 2016-2018, spending will exceed 1 trillion rubles annually. Public sector salaries may require 35 percent of total expenditures, and in ten regions they may exceed 50 percent. In 2014, these figures were 24 percent.

Another important reason can also provoke a regional and national default - this is a reduction in revenue flows to the budget. This situation arises due to insufficient income tax revenue. According to statistics, today the debt by region can be about 900 billion in national currency. Therefore, you should not worry about the possible collapse of the economy in Russia and the fall of the Russian economy.

Is a default coming soon and is it time to withdraw money from the bank? Watch a video overview of the situation:

In 2018, Russia recalled the 20th anniversary of the 1998 default. The word default has stuck in my memory as a synonym for a severe financial crisis, as a result of which the national currency instantly depreciated by about four times. People know less about the prerequisites for a default, so the current economic crisis is also beginning to cause fear among people. Many are worried that the situation of 20 years ago will repeat itself today. Is a default possible in Russia in 2018 or 2019 - what do experts say about this, arguments for and against the likelihood of a new default.

A repeat of the events of 1998 is possible again - Bank of America experts warn

American analysts from Bank of America discovered in the summer of 2018 alarming symptoms of the global economy. The main financial indices of the world show approximately the same dynamics that was observed on the eve of the 1998 crisis. In Russia, that crisis led to that famous default.

Of course, the situation today does not repeat the one that developed in the world economy two decades ago. There are some differences. But in general, the situation is alarming.
What exactly caused the concern of American experts? First of all, the steady growth of the American economy while the markets of developing countries are shrinking. The shares of high-tech companies, mainly from the same USA, are also going up.

Contrary to the vulgar notion that America seeks only its own dominance and the weakening of competitors, in modern world everything is much more complicated. The strengthening dollar and the growing US economy are diverting the attention of investors, who are starting to move away from risky assets in developing countries, including in Russia. As a result, this can lead to a global crisis, which is not at all beneficial for America.

In 1997-1998, the crisis began due to the weakness of the Asian economies. Today the gap is caused by the growing power of the American. Be that as it may, but this bias can one day become dangerous. Experts warn that if special measures are not taken, a crisis similar to the one that caused a default in Russia twenty years earlier could erupt in 2019.

Photo: pixabay.com
Is it possible to repeat the default in Russia in 2018 or 2019

The default in Russia in 1998 was the peak of the global financial crisis. The collapse of the economies of Asian countries reached Russia and brought down the economy of our country. At the same time, however, it is worth remembering that the Russian economy itself was very weak at that moment, so it collapsed from the impact of the global crisis more than it could.

Analysts say that with many of today's problems with the Russian economy, the situation is different in some key details.

Here are a few basic things that underpinned the 1998 default that look different in Russia in 2018:

Budget deficit in 1998 and today. Twenty years ago, the deficit was as high as eight percent of the budget. That's how much the expenses exceeded the income. Initially, the budget for 2018 was also drawn up with a small deficit, but during the year the government revised some of its articles and was able to withdraw a small but surplus. Including for the next reason in this series.

The second reason is the price of oil. A barrel of oil in 1998 cost less than $15, today oil is much more expensive - consistently above $75 per barrel. This helps Russia replenish the treasury with income from the export of raw materials and keep the economy afloat.

The volume of external debt - in fact, it is precisely the inability to pay off debts that is called default. In 1998, Russia's public debt was equal to about 150 percent of GDP. Today it is quite acceptable 40%. This keeps the economy of our country from a new default.

Speaking about Russia's debts in the foreign market, it is worth making a reservation. Indeed, formally, our state does not owe creditors much. But it's formal. There are still a large number of state and quasi-state companies, whose debt abroad in the aggregate is quite large. What will happen if such companies cannot pay their obligations - separate question.

Be that as it may, but the repetition of the default in Russia in 2018 or 2019 is not worth waiting for. Which does not mean that in one form or another the economic crisis will not hit us, and it will hurt.

In 2018 without any default Russian ruble already twice experienced major problems. Its value plummeted in April and August, and the ruble is not immune to something like this at any given time. In this regard, the strengthening of the US economy and the withdrawal of investors from emerging economies, including the Russian one, really cannot but disturb.

At present, a fairly large number of people have appeared who are tired of the promises of politicians and therefore have ceased to trust them. They turned their eyes to psychics, who showed the whole world their incredible gift. They have repeatedly lifted the veil of mystery and brought clarity to incredibly confusing situations.

The situation in the Russian economy in 2018

As for the economy, Pavel Globa gave an ambiguous forecast. He noted that there will be positive developments in the mining industry. Favorable contracts for the supply of fuel will be signed with a number of states. At the same time, this will not affect the general situation in the country, because large sums money will be allocated to the confrontation with NATO. The economic situation will not be stable. Some industries will show noticeable success, while others, on the contrary, will be in deep recession. Against the backdrop of the global crisis and the fall of other currencies, Russia will look like an “average” one, without obvious upward trends, but also without a rapid downward decline.

Development social sphere will be in line with economic progress. Since the economy will not surprise with a dynamic movement, not everything will be good socially either. Tension in society will increase due to the stratification of Russian society. Some regions will clearly lag behind others in social standards. Against the backdrop of a deteriorating situation, a pre-revolutionary situation may arise, and in some regions centrifugal forces will appear to create independent states.

Will there be a default in Russia in 2018-2019?

The key to the successful development of the economy is the gold reserve. According to this indicator, Russia ranks seventh in the world, which indicates the negligible likelihood of an economic crisis. The volume of gold and foreign exchange (international) reserves of Russia in 2017 reached 420 billion dollars. The authorities were able to maintain the reserves of the Reserve Fund and even increase them. So far, the Russian Federation is able to pay off its debts.

Natalya Zubarevich, a specialist in the field of socio-economic development of regions, social and political geography, argues that a sharp decline is not expected.

Sustainability federal budget almost beyond doubt. But the issue of regional budgets is acute. The constituent entities of the Russian Federation are forced to increase the deficit and debt due to the increased social needs of citizens and finance current expenditures at the expense of borrowed money. Every sixth region of the Russian Federation has a debt higher than its annual income.

Representatives of the Higher School of Economics confirm the absence of financial reserves in the regions. The rating of regions in terms of debt burden is headed by the Republic of Mordovia, followed by the Kostroma and Smolensk regions, the Republic of Karelia and the Republic of North Ossetia-Alania. To date, almost half of the subjects are in short supply.

Igor Nikolaev - doctor economic sciences, professor at the Higher School of Economics, also does not share the optimism regarding the socio-economic situation of the constituent entities of the Russian Federation. In the coming years, the Government plans to implement the May presidential decrees, which may lead to increased costs. The regions simply do not have the funds to index the salaries of state employees, improve healthcare, provide citizens with affordable and comfortable housing, improve the quality of housing and communal services, etc. Due to the reduction of federal subsidies, the subjects are forced to look for new sources of income.

Yevsey Gurvich, a Russian economist, head of the Economic Expert Group, member of the Economic Council under the President of the Russian Federation, also expresses his concerns.

The future of the country largely depends on the sanctions policy against Russia and relations with the West. Experts believe that the weakening of the armed conflict in eastern Ukraine will force the United States of America and European countries to soften the sanctions regime against Moscow. But contrary to forecasts, in mid-September, the European Union again extended sanctions, which could cause a default in the Russian Federation in 2018-2019.

Central Bank experts argue that a serious obstacle to achieving economic stabilization is the difficult situation in the labor market. For example, a shortage of qualified personnel hinders the attraction of investments and negatively affects the growth of the Gross Domestic Product. Increasing production capacity will help improve the situation.

The government of the Russian Federation at all international economic forums speaks of an unprecedented rise associated with the strengthening of the national currency and the increase in oil prices. Unfortunately, Russia is still a resource-rich country, while its financial well-being depends on energy prices.

The expert announced the date of default, because of which the money of the Russians will burn

Billionaire Ray Dalio, who is the founder of the world's largest hedge fund Bridgewater Associates, predicted a new financial disaster for the world, PRIMPRESS reports citing Business Insider.

According to the billionaire, a serious financial crisis will happen in the world in the next two years. The economies of those countries that receive most of their profits from the sale of oil, gas and other minerals will suffer the most. It is not difficult to guess that Ray Dalio included Russia among them.

According to the newspaper, the billionaire predicts a default in Russia, due to which the depreciation of the national currency will occur, simply the money of citizens stored in banks will burn, the article emphasizes.

According to the most modest forecasts, this year the outflow of capital from Russia will amount to 55 billion dollars. Although this is not a record (there have been more), economists are seriously predicting a default in Russia.