Russia Warns It May Enter Recession As Soon As This Quarter

Tyler Durden's picture

While hardly coming as a surprise to anyone, Russia is getting increasingly more vocal about the near certainty that the country is about to slam headfirst into a technical (at first), and then outright recession.

Bloomberg reports that Russia’s economy may halt or contract in 2Q or 3Q, citing Maxim Oreshkin, head of Finance Ministry’s strategic forecasting dept.

"It seems that we’ll get negative growth again in the second quarter compared with the previous quarter." Oreshkin says

He added that capital outflows may reach $70b-$80b in 2014, while inflation spikes to 7.2%-7.3% y/y in April, and then peak in May or June at 7.5%. However, that will be it and promptly after inflation will slow by year-end to range of 5%-6%

Still, Russia's Current-account surplus may exceed $50b in 2014, thanks mostly to net exports offseting the capital outflow.  Russia may use National Wellbeing Fund for Crimea infrastructure.

All of this was expected. The only question is how much the Russian recession, which will impact various local companies across the global trade chain, will impact the economy in nearby China and Japan, but mostly Europe. Then again, if there is one person who is praying daily that the Russian economy slams Europe is none other than Draghi, who would use this "external" shock to the "strong" European economy as precisely the wildcard justification needed to launch European QE, instead of bond monetization by the ECB being perceived as the testament to the ECB's failure to spark inflation in Europe on its own for three years.

After all, it is always easier to blame someone for any unpopular actions you would have done anyway. In this case, Europe may actually just succeed.

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ciscokid's picture

There she blows!!!!!

ArkansasAngie's picture

And just what is the IMF's prediction for Russia's contribution toward global GDP?

Growth and more growth?

Ooooops.  Another forecast bites the dust.



Tengri Temujin's picture

Hey the Russians are at least honest about it.  While in the USA we are in the best of economic times enjoying all time record low inflation.

GetZeeGold's picture



Cat's got a point there.

ParkAveFlasher's picture

They hate us for our HELOC's.

LawsofPhysics's picture

LOL!  yes, so what you are saying is, let the defaults occur, sell their assets in BANKRUPTCY and CLEAR THE BAD DEBT, and then we can have a real recovery?

What a novel concept.

How do modern ECON 101 books define collateral these days anyway?


CrashisOptimistic's picture

If there is no contraction in oil output, then there is no contraction of any other sort.

Chewybunny's picture

Living in the USSR taught me that whenever the Russian government is honest about anything, it's usually a tiny sliver of the real problem. My dad tells me stories of how they used to hide most problems from the public by only releasing a little bit, making it seem like the government is aware of it, and thus, in control. The illusion works, be honest about a little thing, and everyone thinks you're honest about everything.

Enjoy that post-Crimea popularity, Putin. When the already hungry start starving, that's when the riots begins. 

BurningFuld's picture

The USA has been in recession since 2007 so it's really no big deal. Suck it up guys.

Dr. Engali's picture

The U.S has been in a depression since 2000, we just masked it over with layers of debt. 


There fixed that for you.



LawsofPhysics's picture

Correct, to make matters worse the most compensation continues to flow to those who are the most incompetent and immoral...

Full faith and credit bitchez..

as in no more faith, no more credit motherfuckers...

Apparently my brother-in-law finally got the message about physical assets and a dependable tribe.  He just bought a 1500 acre property, mainly for hunting clubs etc., but we are helping him get his tribe in order right now.  It takes a few people to manage a property that size, especially with the stables. Through in 1-2 former delta operatives for security.

Nice spread though.  Damn good quail hunting area.

HardAssets's picture

US been in steady real decline at least since Vietnam/'great' society guns&butter

(as measured by real wages of average Americans)

'woman's lib' two paycheck families, all the various 'social programs', cheap goods from China, the blowing up of 'asset' bubbles, and the suppression of gold 'prices' . . . are nothing but smokescreens to hide the long term bankster inflationist theft

NoDebt's picture

We are GO for QE throttle-up and launch of the financial ship EU into high orbit.

yogibear's picture

Just change the stats and lie. Turn the recession into a recovery on paper so everyone goes out and takes out more loans and spends.

SheepDog-One's picture

U.S. in depression for years, terror over prospect Russia may admit they're in a recession? It's a mad mad mad mad world.

Spitzer's picture


This is not a bad thing. The Oliympics is paid for in one month... Well, not really but, just sayin....

walküre's picture

Olympics were too expensive as usual.

rsnoble's picture

You guys are full of it, the US is in a MASSIVE ECONOMIC RECOVERY.  So much so that politicians running for office are now advised not to say anything about the recovery.  I guess it's because the recovery, excuse me massive recovery, is everywhere you look and people are just burnt out with all this growth and opportunity.


IridiumRebel's picture

i just crapped dollars in my shorts! It's a Christmas miracle!!!!!!!

walküre's picture

Clinton vs. Bush 2016

When we tought Obama was the Event Horizon and peak bullshit, the oligarchs are now going full retard in 2016.

Does anyone really give a fucking care anymore? Who is stupid enough to either vote or pay taxes in this sham of a country? How dumb can people be to still play by their rules?

It's all bullshit! It's their bullshit. Let them pay for it!

Russia may be a viable option after all. At least it's Putin vs. Putin all the time, any time of the day. Crimea has nicer beaches than Florida.

Here's my idea for a bumper sticker for 2016

Clinton/Bush vs. Putin 2016


intric8's picture

..and recent developments will hasten it even further. Thanks Obozo!

Dr. Engali's picture

Off topic. It appears the people of China are getting a little tired of their government bureaucrat thugs:


I wonder if Americans will ever say Enough!


IridiumRebel's picture

can you imagine if that crowd was packing heat...ALL OF THEM? That pig parade at the end woulda been a little more careful...or not shown up at all.

10mm's picture

Americans will say enough when it's all or nothing. Were getting there.

Rising Sun's picture

Russia is and has always been a mess.  It's what you get when a bunch of communists run the show.

Bill of Rights's picture

Is this the part where you say " richest Country in the world " bs

yogibear's picture

"I wonder if Americans will ever say Enough!"

The politicains know as long as Americans are stuffed with junk food and get their EBT and welfare payments all will be well.

If the Federal Reserve's inflation gets out of control and the masses will go hungry is when people lose it.

10mm's picture

But will they know who to blame. My guess, we do but vast majority don't.

Chewybunny's picture

There are now more "independents" than either the Reps or Dems. That number being even highest amongst younger voters and gen-xers. The core of either party lies with a growing small, and state depenednt elite, and it is being recognized, albeit very slowly, but a large group of cynical, suspicious, disillusioned, youth.  The moment when Americans will say enough is probably closer than you'd think. It may already be here, and there are those Americans who fear the future enough to maintain the status quo, that would silence anyone shouting "I have had enough!"

FieldingMellish's picture

Looks like they need a war.

IridiumRebel's picture

Like you stated a while back, I am just watching the gold price. When it quits circling the drain and meteors up, I know the rhetoric will be ramped up and war is on the table.

highwaytoserfdom's picture

I am sitting down What is Russia trying to do?  If you report economics as facts how can you enslave in usury cronyism?  Oh yea the west took the Russian  oligarch money in Cypress  and gave it to our oligarch corporate owners.  If you report facts how you going to report drugs and overthrow money of KGB?    Get with the program.......

Martin W's picture

The more Ukraine they take the more money goes away

1stepcloser's picture

Russians need to change their GDP calculation...problem solved..  For ideas see link below

post turtle saver's picture

Let's go to the video tape, shall we...

* Russia central bank rates recently increased from 5.5% to 7%

* reasons cited for the above include 10% decline in value of ruble this year and "market stabilization"

* share value in major Russian companies is down on average ~11% this year, specifically down ~7% since _last week_

* Russia is a world energy supplier, true, but it imports a great many big ticket items and the price of all that goes up as the ruble declines in value... the imports mainly come from western Europe and China, btw

* Russia's GDP growth has _dropped_ 2.1% between 2012 and 2013, and 2014 isn't looking much better

* Hints of increased risk for capital flight are starting to manifest themselves in Russia, with many Russians anticipating increased risk of economic and financial sanctions

* expect Russia's sovereign ratings to be impacted as a result of the above

* worst case scenario, we're looking at a potential trade war that could easily go "hot" in the Ukraine and other Eastern European areas


this is why I keep calling Putin's Ukraine intervention a gambit... the problem with gambits is they can be declined or countered, which is what the US and Europe have decided to do... well, now you're down material and the position advantage is rapidly deteriorating... now what?

post turtle saver's picture

lol @ downvote... got trouble with facts, dontcha?

NDXTrader's picture

I think there may be enough ZHers willing to fly to Russia and fellate Putin that it might spur the economy and get them out of this

giggler321's picture

Never fear the IMF is here, we'll lend you paper

bardot63's picture

So, Russia may enter recession?  It's about time.  The US has been in a serious 1930's type depression for 6 years now.  Parts of Europe are past the depression stage.  Japan hasn't had a working economy in 30 years.  China faces the same slowdown brought on by millions of Americans now too poor to shop for junk crap at Walmart and Dollar Tree.  So, just where is there good news?  Sounds like Russia is just catching up to the rest of us. 

SMC's picture

Wow. A negative, realistic forecast. That used to happen in America when the Federal government still had some credibility.

Sure glad that John Williams at is still crunching numbers without spin and bull$hit.

tradebot's picture

Don't worry, we Got it, we got it, we got it!!!  Whoops!  We Don't got it!

socalbeach's picture

U.S. nominal GDP change in last reported quarter was 1.01%.  Annualized that's 4.1% GDP growth. Being conservative,  price inflation is about 5%/yr (M2 has increased by a little over 6% over the last 12 months), so being generous our economy is contracting by about 0.8% / yr.

Any questions?

MFL8240's picture

Great time to annex the Ukraine and its resources!