Inflation in 2018: Continues to Heat Up

Alexandra V. Bozhechkova – Head of Monetary Policy Department of the Gaidar Institute; Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Pavel V. Trunin – Head of Center for Macroeconomics and Finance of the Gaidar Institute; Leading Research fellow of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Inflation in Russia stood at 4.3% at 2018 year end, posting an increase of 0.3 percentage points over the central bank’s target inflation rate and of 0.1 percentage points over its preliminary forecast. Early 2019 saw prices continue to heat up: consumer prices and services rose 0.7% in the first two weeks of January (versus 0.3% in January 2018). Given the recent trends, the 2019 year-end inflation is expected to vary within a range of 5.0% to 5.5%, but it is not until 2020 that inflation is expected to decline back to the 4% target.

Key words: inflation, monetary policy, key rate, outflow of capital, Bank of Russia.

Survey of Current Business (October 2018 – January 2019)

Sergey P. Aukutsionek – Head of Center for Transition Economy Studies, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Andrey S. Yegorov – Researcher of the Center for Transition Economy Studies, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Tatyana V. Serzhantova – Senior Researcher of the Center for Transition Economy Studies, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences. (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Stanislav V. Belyakov - Researcher of the Center for Transition Economy Studies, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

In October 2018, some of the indicators examined by REB appeared to be significantly better compared with last month data: the share of enterprises not purchasing equipment for 2 or more months in a row decreased by 16 points to 35%, and the share of financially successful enterprises increased by 12 points to 83%.

At the same time, alarming tendencies retained: the diffusion index of output has been falling for five consequent months already and in October reached its minimum over the past 20 months. The diffusion index of order-book level also demonstrates very low values: it was smaller only at the end of 2008 and the beginning of 2009.

Key words: industry, industrial enterprises, price level, wages, employment, output, investment, indebtedness to banks, order-book level, stocks of finished products, capacity utilization rate, risk of bankruptcy, economic policy, crisis duration.

Rise of Prices in 2018: Russia on the World Map

Aleksandra Ya. Burdyak – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration. E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Marina A. Eliseeva – Researcher of the Russian Presidential Academy of National Economy and Public Administration. E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Rise in prices for eggs, sugar, fruit and vegetables, tobacco and gasoline among non-food products, tourism, communal services and education in the services’ sector were main sources of accelerating consumer inflation in 2018. Russia is juxtaposed Brazil, Mexico, India and South Africa according to rates of inflation in per year basis.

Key words: consumer inflation, groceries, nonfoods, services.

Individual Investment Accounts: Results of Introduction аnd Development Prospects

Yury A. Danilov – Leading Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia).  E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

The article discusses the first results of the introduction of individual investment accounts in Russia. The place of this tool for organizing household savings in the range of available investment tools is considered, the patterns of choice of this tool are shown. Based on the analysis of the main indicators of development of this segment of the Russian financial market, it was concluded that this tool is successful and its rapidly growing popularity among Russian households. Formulated proposals to expand the use of this mechanism, including its active use as a tool for private pension savings. It is shown that as such a tool, individual investment accounts are more effective than the project of individual pension capital.

Key words: individual investment accounts, household savings, stimulating long-term investments, financial instrument, tax deductions, individual pension capital, «Long money», securities, investment tool, savings structure.

Global Oil Market: Main Trends 2018

Yury N. Bobylev Head of Mineral Sector Economics Department of the Gaidar Institute; Leading Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Russian crude oil gained 33.5% in value from the previous year, settling at an average of $70.9/ per barrel in the period between January and November 2018. The increase stemmed from, among other things, a cooperative agreement to limit oil production, known as OPEC+. Global oil prices dropped considerably in recent months. The parties to the agreement decided in December 2018 to cut their oil production early in 2019. The agreement may, however, have a far less pronounced effect because of increase in the U.S. shale oil production. Oil prices in 2019 are projected to be far below the average seen in 2018.

Key words: oil, world oil market, global oil prices, OPEC, OPEC+.

Support of small businesses at the regional level: international experience and Russian features

Vera A. Barinova - Head of the Centre for Entrepreneurship Studies, Russian Presidential Academy of National Economy and Public Administration; Head of the Centre for Small and Medium Entrepreneurship, Russian Foreign Trade Academy of the Ministry for the Economic Development of the Russian Federation, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Aleksandеr N. Krasnoselskih - Researcher of the Russian Foreign Trade Academy of the Ministry for the Economic Development of the Russian Federation; Junior Research fellow of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

The research demonstrated that in the international experience support of small and medium businesses is more widespread by way of credits and guarantees as well as by educational and consulting programs. Financial support in the form of grants increases businesses’ profit but negatively affects their productivity. Programs aimed at business activvity infrastructure  are the most popular in Russia.

Key words: small and medium businesses, microbusinesses, business support.

Mega-Regional Current Trade Agreements

Nadezhda P. Volovik – Head of Foreign Trade Department of the Gaidar Institute; Researcher of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

There is no information about mega-regional trade agreements after the US left the Trans-Pacific Partnership (TPP). Although work on such agreements is under way. The article provides a short review of mega-regional trade agreements which are already signed or under discussion. Focal point is on the features of regional deep integration economic partnership under discussion.

Key words: mega-regional trade agreements, regional trade agreements, regional deep integration economic partnership.

Privatization and Issues Related to the Management of Asset Disposition of Companies with State Participation

Georgy N. Malginov – Head of Ownership and Corporate Governance Department of the Gaidar Institute; Leading Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). Е-mail: malginov@ieр.ru

Alexander D. Radygin – Chairman of Academic Board, Head of Center for Institutional Development, Ownership and Corporate Governance of the Gaidar Institute; Director of Institute for Applied Economic Studies, Russian Presidential Academy of National Economy and Public Administration, Doctor of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

The article analyzes issues related to the state property policy regarding regulation of asset dispossession companies with state participation of their assets.

Key words: privatization, companies with state participation, asset disposition of companies with state participation, core assets, incidental assets, Rosimushestvo.

VAR-LASSO Model for the Russian Economy Using a Large Dataset

Nikita D. Fokin – Junior Researcher of the Russian Presidential Academy of National Economy and Public Administration; 2nd year Master Student at Economic Faculty at the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

The article provides a large auto regression with L1-regularization (VAR-LASSO-model) based on monthly values of Russian macro indicators for the case when the number of observations is less than the number of evaluated parameters. The aim of the work is to demonstrate feasibility and the advantage of Russian macro parameters for forecasting with the help of a large set of regressors, which from theoretical point of view should improve forecasts regarding models of lesser dimension. Forecasting properties of VAR-LASSO-model are better than forecasting features of reviewed benchmarks.

Key words: indices of industrial production, ARIMA model, VAR model, VAR-LASSO model, forecasting, oil prices.

Migration Growth: the Record-Low Index in the Post-Soviet Period

Nikita V. Mkrtchyan – Leading Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Geographic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Yulia F. Florinskaya – Leading Researcher of Russian Presidential Academy of National Economy and Public Administration, Candidate of Geographic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Russia’s migration growth has decreased. In 2018, it can amount to 120,000-130,000 persons to become the record-low one in the entire Post-Soviet period and will fail to make up for the natural decline in the population; reduction of the number of the population is expected to take place again. 

Key words: migration, intellectual migration, migration of persons with higher education, domestic migration of persons with higher education.

Petroleum Products Price Freeze – a Halt on Fiscal Manoeuvre?

Alexandra M. Zhemkova - Researcher of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Georgy I. Idrisov - Director of the Center for Real Sector of the Gaidar Institute; Director of Institute for Sectoral Markets and Infrastructure, Russian Presidential Academy of National Economy and Public Administration, Doctor of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Andrey S. Kaukin – Head of Department for System Analysis of Sectoral Markets, Russian Presidential Academy of National Economy and Public Administration; Head of Sectoral Markets and Infrastructure Department of the Gaidar Institute, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Eugenia M. Miller – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

In November 2018, Russia’s Federal Antimonopoly Service (FAS Russia) and Ministry of Energy (MinEnergo) came to an agreement with Russian oil companies to freeze petroleum products prices in the country until March 2019, which may be a headwind for fiscal regulation policies in the Russian petroleum industry. The today’s fiscal manoeuvre parameters coupled with the price freeze are not considered optimal in terms of benefits and costs for all the market participants, namely the state, oil companies, consumers.

Key words: oil, petroleum products, oil prices, freezing oil prices, tax maneuver.