In the first nine months of 2015, Russia's GDP decreased by 3,7% in real terms, after having grown by a modest 0,6% in 2014. The most recent economic indicators signal a persistent weakness of the economic situation in the final months of the year and, according to the preliminary estimates reported by the Intesa Sanpaolo Study Centre, GDP decreased by 3,7% for the full year. The continuation of the current tensions and an oil price at current levels (below $40 a barrel) will probably lead to a further decrease in GDP in 2016 (-1%). The inflation trend rate closed 2015 at 12,9% and is expected to slow down further in 2016. The slowdown in inflation should allow the Central Bank to implement new appeasing actions. The 2016 Budget, compiled assuming an Ural oil price of $50, sets as a target a deficit of 3% of GDP. The drop in the price of oil to 30 dollars, if confirmed throughout 2016, in the absence of adjustment measures, would lead to an increase in the deficit of 7%-7,5% of GDP. Furthermore, during 2015, the ruble depreciated by a further 30% against the dollar (to 73 RUB : 1 USD at the end of December 2015). However, nine bearish pressures have manifested themselves at the beginning of this year. In the short term, the USD/RUB exchange rate will mainly depend on the trend in oil prices and on the propensity of foreign investors to invest in emerging countries. Assuming a progressive recovery in the price of oil (to 50 dollars a barrel), the RUB/USD exchange rate could return below 70.
In the period January-September 2015, the current balance of payments surplus widened to 52,7 billion, from 44,1 in the same period of the previous year. The preliminary data of the Central Bank highlight as from January to November the net outflow of private sector funds was less than half that seen a year earlier (53,6 billion against 118,7 billion). During 2015, the process of draining foreign exchange reserves, while continuing, has slowed significantly compared to what was seen in 2014. In December 2015, these amounted to 309 billion against 328 billion in the previous December. Falling oil prices, deteriorating fiscal position, sizeable capital outflows and drain on foreign exchange reserves prompted all three major agencies to downgrade Russia's sovereign debt rating. S&P (in January) and Moody's (in two moves in January and February) removed the investment grade rating from the country, assigning it BB+ from BBB- and, respectively, Ba1 from Baa3, in both cases with a negative outlook. Fitch also changed its rating from BBB to BBB-/N, however still keeping it in investment grade.
In this scenario, Russia's trade in 2014 amounted to about 785 billion dollars (-6,9% compared to the previous year). Both imports (-9%) are down, reaching 287 billion, and exports (-5,6%) to 498 billion, penalized by the trend in energy prices. Data relating to the first ten months of 2015 show a further worsening of Russian trade: trade shows a reduction of about 34%, in particular on the side of imports, which weakened by 38% and stood at 150 billion, while in the same period the exports recorded a decrease of 32% reaching 289 billion. During the first ten months of 2015, Russian exports, historically made up mainly of minerals, in particular energy, saw their share of the total decrease, penalized precisely by the trend in quotations. While in 2014 minerals accounted for around 70% of total exports, this percentage dropped to around 53% in the first ten months of the year. Metals, on the other hand, went from 8% to 10%. Minor quotas are covered by chemical products, agro-food and stone, glass and ceramics. Among imports, machinery is confirmed at 33%, followed by means of transport (from 15% to 9%), agri-food products (14%), chemical products (13%) and metals (7%). The main trading partner in 2014 was the European Union as well, with a 44% share of total Russian trade, followed by the Asian markets with 28%. The area of the CIS countries is also significant with a share of around 11% (with Ukraine at 2,8%). China is the most important country for Russian trade, with a share of over 11%, followed by the Netherlands (9%), Germany (7%) and Italy with over 5%. In addition to China, Germany and the USA, the major suppliers also include Italy, Belarus, Japan and the Ukraine, which supply machinery, means of transport, metals and agro-food products. Among the main destination markets, in addition to those already mentioned, there are Japan, South Korea, Belarus, Poland and Turkey.
The stock of FDI in Russia in 2014 was valued at $378 billion (give UNCTAD), down more than 33% from the previous year. Russia's share is 20,3% of GDP and 1,5% of the world total. The main investment sectors of foreign capital are manufacturing (41%), followed by services (40%) and primary (19%). Outgoing FDI stock was 432 billion (1,8% of the world total). Italy invested around 1992 billion euros in the period 2014-7,3, with around 590 companies operating in the area. Italy's trade with Russia reached its peak in 2013 with around 31 billion. In 2014, the crisis with Ukraine, the sanctions imposed by the EU, together with the progress of the Russian economic crisis, limited trade to 26,8 billion, with an annual decrease of 13,5%. The data relating to the first ten months of 2015 show a further contraction in flows for an amount of 4,7 billion (-20,4%): imports, equal to 12,4 billion, fell by 2,5 billion ( -16,6%) and exports, equal to 5,9 billion, of 2,2 billion (-27,5%). In the period considered there were significant decreases in imports of minerals (-17%), refined petroleum products (-40%) and chemicals (-25%), while those of metals (+34%) and the wood, paper and printing sector (+17%) grew. Among the main exported categories, we note the variation in mechanical machinery (-20%), textiles and clothing (-33%) metals (-39%) and electrical appliances (-33%). Exports of the agri-food sector in the first ten months of 2015 amounted to 306,8 million euros, down by approximately 213,7 million compared to the same period of the previous year (-41,1%). While the product categories affected by the sanctions, equal to 1% of the total in 2014, fell by over 87% reaching 9,8 million at the end of 2015 (0,2% of the total).
