Thursday, January 8, 2015
Russia Entering 'Full-Fledged Economic Crisis'
http://www.reuters.com/article/2014/12/22/russia-crisis-idUSL6N0U61L320141222. DUE 12 January 2015. What are the predominant reasons for Russia's economic woes? What does the term "junk" refer to in this article? What will be the impact of inflation for the Russian economy?
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Russian is entering a full-fledged economic crisis because they did not tackle their financial problems fast enough. The predominant reasons for Russia’s economic status of junk were the added sanctions over Ukraine and falling oil prices. Also a flight of investors capital, made worse by a lack of structural reforms. They are dependent on oil revenues. Junk as referred to in this article means to have your debt downgraded very low and in Russia’s case it is due to the collapse of the rubble. It has been warned that the full effects will be felt in 2015.
ReplyDeleteThe currencys’ decline will likely help to push inflation to a rate of 12-15 percent this year. Even if the price of oil rose to $80 per barrel, gross domestic product will decline by more than 2 percent. The 25 and 35 percent of the decline in the rubble will down some 45 percent against the dollar. The rest was down to a stronger dollar and investors mistrust of Russian authorities and their actions.
The predominant reasons for Russia's current economic status was due to the decreasing/falling oil prices and the sanctions that were added on to the Ukraine. Another factor that has placed a detriment on the Russian economy is the flight of investors' capital, which in all made in worse by the lack of the structural reforms implying that Russia's dependence on their economy lies solely on the oil revenues.
ReplyDeleteThe term "junk" implies that Russia will, as stated in the article, downgrade of the economy into what is known as a decrease in the debt for Russia. Concerning the inflation on the Russian economy, the decline on currency will benefit to push the concept of inflation. Inflation will cause the prices of oil to possibly increase, but on the same note decrease "25 and 35 percent of the decline in the rouble - down some 45 percent against the dollar so far this year".
The predominant reasons for Russia's economic woes are: them “not tackling [their] financial problems fast enough.” These financial problems stem from the sanctions over Ukraine, the OPEC oil agreement that caused the massive drop in oil prices and the loss of investor’s capital. The term "junk" refers to the downgrading of Russia’s economy. The inflation will grow to be“12-15 per cent” for 2015. The impact of this inflation for the Russian economy will be the possible increase in oil prices but a decline in the value of the Rouble.
ReplyDeleteThe predominant reasons for Russia's economic woes are economic sanctions from the West, declining oil prices, and a falling ruble. According to this article, the predominant reason for the economic troubles come predominantly from Western sanctions, rather than the falling oil prices. However, the Russian economy is becoming dependent on oil sales and as prices fall, the economic harms will continue.
ReplyDeleteJunk refers to the Russian bond ratings. The term junk means that the Russian bonds have a high risk of defaulting. As a result of this rating investors will be less likely to buy Russian debt and so the Russian government will lose access to foreign capital.
Inflation would mean that the Russian currency will be pretty much worthless. As a result, Russian citizens will have to pay more and more money for food and basic necessities. Eventually the currency might be so worthless that people stop using it. This will dismantle the Russian economy.
While many have viewed the economic crisis in Russia to be predominantly the fault of oil prices (which Russia depends so heavily on) and the recent agreements of countries in OPEC, former finance minister Kudrin believes this is a side effect of the “bigger” issue. The main reason is the sanctions placed by Western countries on Russia, which limits its ability in obtaining Western capital (which is much needed if the rouble should stabilize). This is due in part to the political conflicts in Crimea.
ReplyDeleteJunk status refers to the potential drop in Russia’ currency.
Inflation will be full-fledge this year, where the GDP will lower (even if oil prices return to a higher price than the roughly $68 it is now). The government needs this money to keep from going bankrupt. This would also cause a larger price on goods (such as in grain, currently) and also the defaulting of oil industries (the major economic resource of Russia).
The predominant reasons for Russia's economic woes are their response to Western sanctions following their annexation of the Crimea region in Ukraine, sharply declining oil prices, and the departure of investors capital. Further worsened by a lack of structural reforms causing too heavy a dependence on oil. In this article "junk" refers to the credit rating of bonds in Russia. Russia is expected to have their rating downgraded to junk which is a rating for bonds that are at high risk for default.
ReplyDeleteThe impact of inflation for the Russian economy will be a decreasing gross domestic product (GDP). Other impacts could be an increase in debt and further decreases in investor capital from other countries and even within the country. Though oil prices may rise, the economy will still be worse off. Citizens may have a harder time paying for basic necessities of everyday life. Eventually if the inflation becomes too severe the country may default which is like bankruptcy but for a country.
The main reasons for Russia's current economic status are due to the falling oil prices and the sanctions put in place in the Ukraine. Another reason is the fact that many investors are taking their money out of the Russian economy. This is bad because Russia relies a lot on the profits from oil.
ReplyDeleteThe term "junk" refers to the downgrade in the Russian economy into what it is now. This impact will likely cause inflation in the oil prices. It can also lead to the decline of the Russian currency, the ruble.
The predominant reasons for Russia’s economic distress include the falling oil prices and sanctions placed by western countries that all incorporate into the degrading ruble. According to the article the actual main reason for Russia’s economic down turn is mainly because of the sanctions over Ukraine. However, the falling oil prices, sanctions, loss of investors’ capital, and lack of structural reforms contribute to how Russia has become more dependent on oil revenues.
ReplyDeleteWithin the article the term “junk” refers to Russia’s downgrade in economic status. Ex-minister Kudrin predicted that a series of defaults within large or small enterprises is most likely to result in rating agencies downgrading Russia’s debt to “junk” status. Within the Russian economy, the main effect of inflation would be that the worth of the ruble would completely drop or the debt they have acquired will increase. Because of this, citizens would have to pay more money for their basic needs and eventually this would lead to Russia’s economy crumbling.
Russia's economic collapse has been attributed by both the use of sanctions placed on the Russian economy, and falling crude oil prices. This problem was exasperated from the delayed response by the Russian Government. The term junk in the article refers to a credit system of investing.
ReplyDeleteThe term "junk Status" actually refers to the lowering standard of Russia's economic status.A junk status is really bad in terms of those investing in Russia's debt in return for high interest rates. Junk investments usually run the risk of long repayment times if not not being paid at all.
The impact of inflation of a rate of lets say 10-12 % will cause the currency to lose its value. The rouble, Russia's currency, currently holds at about 55-1 to the american dollar which is horribly. The citizens of Russia will have to spend more on basic necessities that would have otherwise costed less in terms of using less physical currency. The economy would in theory collapse if citizens refused to use the currency and abide by the governments policies to combat the increasing inflation rates.
Russia's economy is currently failing because they have not dealt with their problems fast enough. The problems came from the sanctions placed on them from the Ukraine crisis, and the falling crude oil prices. In addition, Russia has faced little investor capital. "Junk Status" means the lowering of that countries economy, in this case Russia. Getting junk status is terrible for a country, as it means that the country will have to take out loans with a higher interest rate, because the investors run the risk of not getting all of their investment back. Inflation will cause the value of the ruble to plummet, meaning the average person will have to spend more for everything.
ReplyDeleteThe predominant reasons for Russia's economic distress are plummeting oil prices, sanctions from the Ukraine incident, and a flight of investors' capital. These reasons are made worse by a lack of reforms that have left the country dependent on oil prices. Kudrin argues that the sanctions, and not the oil prices, are the main reason for Russia's economic crisis. The term junk in the article refers to the bond rating. If Russia's ratings downgrade to junk ratings, they will have extremely high risk and will scare off even more investor capital. The impact of inflation for the Russian economy will continue to drop the value of the ruble. Russians will struggle to pay for basic goods due to the increased prices and Russia will struggle to trade in the global economy.
ReplyDeleteRussia’s economic woes are mainly in part due to the fact that they were not able to attack their financial problems as quickly as possible. It started with the falling prices of both oil and sanctions on the Ukraine, along with the flight of investor’s capital that were caused by weak structural reforms. Russia has been dependent on the revenue they receive from oil and now they are in an economic structure called “junk” which is basically having debt downgraded lower than usual. This caused a collapse of rubble that affected Russia negatively and might incur more negative effects in the near future.
ReplyDeleteInflation on Russia economy will be full-fledged this year, with GDP lowered and the oil prices not affecting it as much if it were to increase. Again, Russia is dependent on their revenues from oil and they need the money in order to prevent the economy from becoming bankrupt. This also means that other goods will incur a higher price while the oil industry will default.
The predominant reasons for Russia’s economic woes are because the government has not worked fast enough in order fix its financial problems, the falling oil prices, sanctions over Ukraine, and investors pulling out of its economy. In this article the term “Junk” refers to Russia’s debt, Kudrin foresees that Russia will default, or not be able to pay back, the medium and large enterprises that have made loans to Russia, as a result other enterprises will not want to loan money or invest into Russia making it “Junk”. Inflation in the Russian economy will cause oil prices to rise again however gross domestic product will fall by two percent.
ReplyDeleteThe predominant reason for Russia's economic distress is the lack of quickness by the government to address financial problems, crude oil prices decreasing and sanctions from Ukraine. "Junk", a term used in the article is used to refer to bond ratings. Russia has now been degraded to junk status which is terrible for the country due to the fact that if they wish to take out a loan they will be charged with higher interest rates. Inflation will affect Russia negatively in terms of the rouble being in a ratio of 55:1 to the US dollar. Also, Russian citizens might find it more diffucult to pay for basic necessities and goods due to increased prices. With all of this happening in the Russian economy, Russia might default or become bankrupt.
ReplyDeleteRussia's economic failure can be attributed to their lack of action. Sanctions placed on Russia by the US due to the Ukraine situation has caused several problems, falling oil prices being one of them. "Junk" refers to Russia's falling economic status, leading to inflation. Inflation will cause the rouble to lose its value, making it harder for average citizens to pay for their necessities. It can also lead to Russia going bankrupt.
ReplyDeleteThe key reasons why Russia's economy is in shambles is the government failing to act swiftly in dealing with it, falling oil prices are also a major reason, sanctions over the situation in Ukraine is a third reason and lastly investors are abandoning the Russian economy. However in the article oil prices are pointed out as the main reason for collapse. The term "Junk" refers the Russian debt which Russia is now in danger of defaulting on their loans. If they default on their loans and the Russian Ruble will experience severe inflation at a rate of 10 to 12 % and it will not help it due to the fact that the Ruble to Dollar conversion rate is 55 to 1. As a result it would be a lot harder for Russians to buy basic goods.
ReplyDeleteThe predominant reasons for Russia's economic woes are their response to Western sanctions following their annexation of the Crimea region in Ukraine, sharply declining oil prices, and the departure of investors capital. The problems came from the sanctions placed on them from the Ukraine crisis, and the falling crude oil prices. In addition, Russia has faced little investor capital. The term "junk" refers to the downgrade in the Russian economy into what it is now. This impact will likely cause inflation in the oil prices. Inflation will cause the value of the ruble to plummet, meaning the average person will have to spend more for everything.
ReplyDeletePredominate reasons for Russia’s economic woes are sharp declines of oil prices, departures of investors, and sanctions over the situation over in the Ukraine.
ReplyDeleteIn the article the term junk refers to the Russian Debt, and falling economic status that is leading to inflation.
The impact of inflation for the Russian economy will lead to the value of ruble to drop severely; Citizens will have to pay more money for basic necessities. Eventually the Russian currency will be barely worth anything or of no worth.
The predominant reasons for Russia's economic woes are not tackling the economic problems fast enough, sanctions over Ukraine, and falling oil prices as. The article goes on to state that the effects of the ailing economy won't be felt until next year, or this year as of today. Junk refers to Russia's debt status in 2015, junk is high yield debt. So say you wanted to buy bonds from Russia, they will have an extremely high return because they have no money at the moment which is why they are junk rated, but you will have a low probability of being payed back because of that high debt. The impact of inflation on the economy will raise many of the prices for goods in Russia because inflation is said to increase by 12-15 percent in 2015.
ReplyDeleteThe predominant reasons for Russia's economic woes are the decreasing oil prices, the response to imposed sanctions and the leaving of investors. These are all parts of the "perfect storm" that has hit Russia. The term junk status means the potential decrease in Russia's currency.
ReplyDeleteInflation in Russia will result in people having to pay more money for everything including basic necessities as well as lead to the possibility of Russia going bankrupt.
The main causes for Russia's economic woes are the sharp declivity is oil prices, imposed sanction responses and just not "tackling" the economic issues fast enough. Junk in the article refers to the economic status of Russia this year.
ReplyDeleteThe inflation in the country will lead to citizens having to pay a lot more for things that didn't use to cost as much. It also decreases the value in ruble. Russia's economi condition is in critical condition, and would remain so until otherwise occurs.
Russia's economic down turn was caused by its failure to tackle its economic crisis swiftly enough. Witch included: Decreasing oil prices/ and sanctions that were added on the Ukraine, and major loss in investors! Junk refers to the state of of economy currently form were it was before, and how it had declined drastically.
ReplyDeleteInflation might cause then oil prices to rise but at the same time could cause the ruble to drop -around 25%.
The predominant reasons for Russia’s economic woes lie in the decline in the oil prices, as well as sanctions placed on the Western countries due to political conflict. The value of the Russian rouble has declined. Their worsening economic status is due to Russia’s lack of action in regarding these events. Junk status refers to a downgrade in Russia’s debt, meaning that there is a high risk in any investment, therefore scaring any potential investments to be made.
ReplyDeleteThe impact of inflation affects the value of the Russian GDP, for even if oil prices were to rise, the GDP would still fall. The value of the Russian rouble will fall, and citizens will have a difficult time paying for necessities. If inflation should worsen, it may lead the country to default.
Russia's economic woes stem mainly from the decrease in oil prices and economic sanctions from the West, causing the value of the ruble to drop significantly in recent months. Russia, a nation so dependent on its oil resources, will continue to face this economic decline because they failed to act fast enough when the problem was first arriving. The term "junk" is used to classify Russia's bonds ratings, which, once enacted, would mean they are at high risk for default. While the currency may stabilize, The country is expected to face inflation at a rate of 12-15% in 2015, and 8% the year after. Even if the prices of oil barrels rise, Russia will still face significant drops in its GDP.
ReplyDeleteThe predominant reasons for Russia’s economic woes are Western sanctions following Russian incursion and annexation of the Crimea, plummeting oil prices, and a flight of investors’ capital. Between 25 and 35 percent of the decline in the ruble is attributed to the sanctions. Russia’s situation also continues to worsen due to its lack of structural reforms meaning that the economy is largely dependent on oil revenues. In this article the term “junk” refers to a bond credit rating. Junk bonds have a high default risk and are risky investments.
ReplyDeleteThe impact of inflation for the Russian economy will be devastating. Currently Russian inflation stands at 8 percent and is expected to double. There will be a significant increase in the price of commodities. Investment into Russia’s economy should also expect to decline. Even in oil prices were to rise to $80 per barrel, GDP is still expected to fall.
The predominant reasons for Russia's economic woes are the economic sanctions in place and the falling price of crude oil. This is true because 25-35 percent of the decline in rouble could be directly lined to the sanctions, also the fall in crude prices gives the government less money to work with seeing how the "economy is overwhelmingly dependent on oil revenues." Also I group the sanctions with the mistrust of investors because the reason there is mistrust is because all the effects it has on Russia. The term junk is the rating a country gets in terms of bonds when there is a higher risk in investing in them. The impact of inflation is clear it's the devaluing of their currency. This is bad because prices will rise and although they will probably have more money they would have to bring in barrels of money just to buy a sandwich.
ReplyDeleteThe primary reasoning behind RUssia’s economic shortcomings is the constantly fluctuating oil prices and manly, the fault of responding in a timely manner to their own financial issues. These have combined to result in a status of being known as “junk.” the article is issue implications that Russia’s economy will continue to downgrade and snowball into a steep decrease. RUssia’s debts have been tossed to bottom of the pile and the bottom of everyone’s minds and priorities. Less people will invest in Russia bonds and less people will be reminded to pay them back. In 2015, Russia’s inflation will reach a full 12 to 15 percent. This concludes that Russian citizens will be forced to pay abnormal excesses for the basic necessities and food. To the rest of the world, Russian currency is practically nonexistent, possibly to the point of disuse completely.
ReplyDeleteThe main problem with Russia is investors who is credited with building Russia's $170 billion worth of sovereign wealth funds -- added that sanctions over Ukraine, not falling oil prices, were primarily behind the collapse of the rouble and warned that Russia risked seeing its debt downgraded to junk status in 2015. On Monday Russia announced plans to impose a heavy tax on grain exports since rouble volatility and high global prices have caused exports to spike. Russian news agencies reported Prime Minister Dmitry Medvedev told a meeting with officials that the country needed to hang on to its stocks. And though the country's top oil firm Rosneft said it had made a $7 billion debt repayment from its own cash reserves, easing some investors' worries, Russia's central bank said it would have to bail out mid-sized Trust Bank with 30 billion roubles ($544.54 million) to stop it going bankrupt.
ReplyDeleteJunk refers to the grade or level rating of their credit or reliability. Anything below a C rating is considered a junk bond, or something along those lines cause their high risk and are less likely to have a return. e term "junk" refers to the downgrading of Russia’s economy. The inflation will grow and the ime term "junk" refers to the downgrading of Russia’s economy. The inflation will grow to be“12-15 per cent” for 2015. The impact of this inflation for the Russian economy will be the possible increase in oil prices but a decline in the value of their dollar
In my defense I thought government didn't have a blog!! Please spare me!
ReplyDeleteRussia does have many problems. The biggest problem is the sanctions against Ukraine. As a leader you have to mantian relations with other big time importers and exporters because you never know when you will need them. The falling gas prices are not helping either. With all these problems many people forget about Russia debt and that know has been a last priority following other problems
ReplyDeleteThere's many reasons why Russia's economy is so bad. One of the main reasons is that they are not taking care of their financial problems fast enough. Other reasons include oil prices falling, sanctions over Ukraine, and the loss of investors are causing Russia's economy to fall. The term junk refers to the downgrade in Russia's economy. There's a number of defaults among medium and large enterprises, which might move Russia into junk territory. In 2015 inflation will likely raise to a rate of 12-15 percent. Prices will raise making it hard for the people there to be able to afford the things they need. Even if they raise prices the GDP is still going to fall.
ReplyDelete