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Regional Budgets in 2019

Igor Yu. Arlashkin – Researcher 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.

Results for 2019 look rather positive: consolidated budgets of 50 regions boasted of surplus, public regional debt demonstrates a downturn trend, rates of budget revenues growth outstrip the inflation rate. However, revenues growth rates slowed down against 2018 and surplus in the regions as a whole contracted to near zero. Expenditures (14.2%) were growing at a significantly faster pace than the revenues (9.5%). Implementation of regional and federal projects at the subnational level requires sustainable growth of expenses and current rates of economic growth amid plummeting oil prices and coronavirus pandemic can fail to secure sufficient growth of budget revenues. In this context, already in 2020 certain regions can face fiscal imbalance.

Key words: consolidated budgets revenues, consolidated budgets expenditures, regional budgets, corporate profits tax, personal income tax, public debt, national projects, federal projects.

Retail Lending at Year-end 2019

Sergey A. Zubov – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Сandidate of Economic Sciences, Associate Professor (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

At year-end 2019, high rates of the retail lending market were registered. This growth demonstrated increased accessibility of loans to households amid moderate inflation and stable financial state of households. Excessive banking sector’s liquidity was an additional trigger for this growth. Meanwhile, the excessive level of the debt burden can lead to losses in the banking sector, pose risks for the real sector of the economy, provoke adverse social consequences.

Key words: Russian banking sector, housing loans, retail loans, consumer credits, retail deposits, debt burden rate, personal credit rating.

Morbidity and Mortality in Russia from Flue in 2008-2019

Ramilya R. Khasanova – Senior 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.

At present the world community is preoccupied with the unfolding of the new coronavirus pandemic COVID-19. The number of pandemic-related cases and death toll globally and in Russia is surging. Quite often this disease and mortality rate compare with seasonal flue. Analysis of the current statistics of cases and the death toll from seasonal flu demonstrate deviations depending on the year; the highest rates were registered during the swine flu pandemic in 2009 and the flu pandemic in 2016.

Conducted analysis demonstrates that coronavirus as flu can infect a person at any age. Mortality rates from COVID-19 demonstrate higher mortality rate in older age groups; similar picture was observed with flu pandemic in 2016. However, the coronavirus related mortality rates are higher than from flu (January 2020).

Key words: coronavirus, COVID-19, flue, pneumonia, morbidity, mortality.

Survey of Current Business (January-April 2020)

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 – Senior 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.

Inessa A. Bachirova – 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.

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.

In January 2020, the share of enterprises that did not purchase equipment for 2 or more consecutive months was the lowest in the entire history of observation since 1993. It decreased by 32 percentage points compared to the previous month and amounted to only 16%. Even less was the share of enterprises that are not going to purchase equipment in the next three months: it decreased by 23 points to 15% of enterprises.

The diffusion index of three-month expectations of indebtedness to banks increased significantly. It has added only 9 points since last month, but it has not been this high (38) for 23 years.

Key words: Russia, industry, industrial enterprises, price level, wages, employment, output, investment, indebtedness to banks, order-book level, stocks of finished products, capacity utilization rate, financial situation, production restrictive factors.

Socio-Economic Situation in Russian Regions and Demographic Results of 2019

Natalia V. Zubarevich – Main Researcher of the Russian Presidential Academy of National Economy and Public Administration, Doctor of Geographic Sciences, Professor (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Alla O. Makarentseva –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.

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

Weak growth in 2019 prevented most regional indicators from returning to pre-crisis levels. Income started to grow in 59 regions, but the crisis recession was not overcome. Growth in regional budget revenues slowed down despite significant growth in transfers. Expenditures grew one and a half times faster than revenues, which resulted in budget deficits in 36 subjects of the Russian Federation. Regional differentiation of per capita social expenditures was somewhat mitigated; social expenditures were a priority for the vast majority of regions.

For the second year in a row Russian population decline. It has happened due to both a significant reduction in the number of births and an insufficient reduction in mortality. The natural decline of Russia’s population in 2019 was 316,200 people, with a total decline of the population by 35,600 people. The mortality rate fell by 1.6 per cent (to 12.3 per 1,000 population) compared to the previous year. The total fertility rate in 2019 was 1.51 children per woman of reproductive age – which was 4.4% lower than in 2018 (1,58).

The migratory growth of the Russian population in 2019 increased to 285.6 thousand people. However, it did not compensate the increased natural loss of population. The increase in migration growth has affected the migration balance of many regions of the country, including Siberia and the Far East. However, main centers of attraction remained the same.

In 2019 there were noticeably more foreigners temporarily staying in Russia – especially tourists, employees and those who arrived for private purposes. The number of labor migrants from the CIS countries is increasing by 3–5% from year to year, except for Ukraine and Moldova citizens. The share of migrants legalized on the labor market changes a little and fluctuates around 70%.

Key words: regional development, money income, budgets, population, birth rate, mortality, migration.

Overpricing in Public Procurement of Cars

Dmitry S. Gordeev – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration; Senior Researcher of the Institute of International Economics and Finance, Russian Foreign Trade Academy, 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. Kaukin – Head of Department for System Analysis of Sectoral Markets of the 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.

Alexander O. Tomaev – Researcher 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.

Dmitry Yu. Shagarov – Junior Researcher 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 article develops a method that allows to identify and explain overpricing in public procurement of heterogeneous goods. In the first step, the hedonic model is evaluated and key characteristics affecting car prices are identified. The market prices predicted are then compared with actual contract prices. In the final step, the differences between contract and market prices are explained with the second model.

Key words: public procurement, hedonic model, heterogeneous goods, pricing.

Socio-Economic Situation Right before the Epidemiological Crisis

Tatiana M. Maleva – Director of Institute for Social Analysis and Forecasting, Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences, Doctor of Business Administration (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Elena E. Grishina – 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.

Marina A. Eliseeva – Researcher 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.

Dmitry M. Loginov – Senior 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.

Consumer inflation at the end of 2019 was 3%. From February 2019 to February 2020, prices rose by 2.3%. In 2019 retail trade turnover increased by 1.6% in comparable prices relative to the previous year. The households’ credit debt to banks increased by 18.2% in nominal terms, with 4.2% of debt overdue. In 2019, the volume of bank deposits of the population grew by 7.3%.

The unemployment rate amounted to 4.6% in 2019, renewing the historic minimum. In January 2020, the number of employed people was 132 thousand higher than in January last year, while the unemployment rate decreased by 0.2 p.p.

In 2019 the real disposable income of the population increased by 0.8%, while the real size of pensions increased by 1.5%. According to preliminary data of Rosstat, the average monthly wage in 2019 was 47468 rubles, which in real terms is 2.9% higher than in 2018. Monetary incomes of 12.3% of the population in 2019 were below the minimum subsistence level, therefore the share of the poor decreased as compared to the previous year (12.6%).

In February 2020, the majority of the population (56%) gave negative assessments of the country’s economic situation, while the prevalence of positive characteristics was quite high (34% of respondents). The survey registered expectations of rather positive changes in both the macroeconomic situation and personal welfare. New social support measures introduced in 2020 for families with children are actively approved by the population (over 85%). At the same time, these measures will directly affect from 10% (maternity capital per firstborn) to 22% (free hot meals in school grades 1–4) of Russian households.

Key words: labor market, wages, monetary income, consumer price index, social well-being, social programs for families with children.

Russia’s Foreign Trade in 2019: Stabilization of Non-Oil and Gas Exports

Alexander Yu. Knobel – Head of Foreign Trade Department of the Gaidar Institute; Director of Center for Foreign Trade Department 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.

Alexander S. Firanchuk – 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 2019, exports of fuel and energy commodities decreased by 8.8% as compared with the previous year on the back of a drop in global prices of energy commodities. Non-oil and gas exports declined by 0.8% in value terms because of depreciation of global prices of some commodities of this group that failed to be compensated by weak growth in the volume of exports (+1.5%). From July, imports surpassed the index values of the previous year, having increased by 2.2% over the year.

Key words: foreign trade, export, import, rate of exchange.

Orientation Criteria for Regional Vocational Education Systems on the Needs of the Economy and Social Sphere

Nataliya Yu. Postalyuk – Chief Researcher of the Samara branch of the Russian Presidential Academy of National Economy and Public Administration, Dr. Sci. (Pedagogy), Professor (Samara, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Viktoriya A. Prudnikova – Director of the Samara branch of the Russian Presidential Academy of National Economy and Public Administration, Cand. Sci. (Pedagogy), Associate Professor (Samara, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

The article presents a system of criteria establishing the level of orientation of regional systems of VET to the demands of the development of the economy and social sphere of the constituent entities of the Russian Federation.

Various approaches to determining the contribution of vocational education to regional socio-economic development are considered. The factors that act as correlates of the orientation of regional VET-systems to the requirements of the economy are identified.

Key words: compliance criteria, vocational education and training (VET) system, region, socio-economic development, factors.

Inflation and Monetary Policy in the Context of Large-Scale Shock

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 Researcher of the 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 beginning of this year was characterized by a slow increase in consumer prices, stability in the forex market, and continuing monetary policy easing. However, the situation has changed dramatically as a result of the impact on the economy of two major interconnected shocks: a slowdown in the global economy triggered by the historically unprecedented coronavirus pandemic and a dramatic plunge of oil prices. In response to the ruble weakening in March, the Bank of Russia launched a package of measures designed to ensure financial sustainability decided to maintain its key rate at 6%.

Key words: inflation, basic inflation, annual inflation, prices, consumer prices, monetary policy, key interest, rate, target, Bank of Russia.

Tax Maneuver and Crude Oil Supplied to Belorussia

Andrey S. Kaukin – Head of Department for System Analysis of Sectoral Markets of the 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.

Development of crude oil supplies between Russia and Belorussia in the context of gradual reduction in customs duties to zero-rate tariff on crude oil depends on further specification of current arrangements. In the event of fixed volumes of crude oil supplies to Belorussia, the oil companies will bear financial losses by getting a reduced premium paid to them by Belorussian oil refineries for the duty-free oil supplies. The Russian economy would prefer quite a different option envisaging moderate decrease of crude oil supplies to Belorussia while increasing their own oil-refining capacities which would be in response to the implementation of tax maneuver in Russia.

Key words: Belorussia, tax maneuver, oil, export duties on oil and petroleum products, MET.