Russia’s Economy on Track for Gradual Recovery – President Vladimir Putin

Speaking at an annual end-of-year news conference on Friday, Russian President Vladimir Putin said that the country’s economy was on track for a gradual recovery. Slump in oil prices and the subsequent ruble crisis pushed Russia’s economy into the longest recession in two decades.

Putin said that Russia’s economic contraction is slowing, capital flight is fading and real wages are starting to recover. He said the Russian economy was on track to contract by 0.5-0.6 percent this year, while inflation for the whole of 2016 was likely to reach 5.5 percent. Putin said the budget deficit was seen at 3.7 percent of gross domestic product (GDP), while net capital outflow was seen at up to $17 billion.

“A positive trend has emerged, and in recent months we observe very modest, but still growth in real wages in the real sector of the economy,” said the president, stressing that economic difficulties still remain.

The president said he supports the clean-up of the banking system being carried out by the country’s central bank and added that regulation should be eased for smaller banks. He also stressed that Russia has no intention to isolate itself from the world and should be part of the global economy.

According to a report published by the International Monetary Fund (IMF) last month, Russia’s 2016 forecasts were revised upward, seeing a contraction of just 0.6 percent. For 2017, the IMF continues to forecast economic expansion in Russia at a “subdued” rate of 1.1 per cent, helped by a modest recovery in oil prices.

“The Russian economy is emerging from recession after the dual shocks of the drop in oil prices and international sanctions over military intervention in Ukraine”, the International Monetary Fund said in a report.

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وزير: استثمارات الصين في الخارج تتجاوز 161 مليار دولار في 2016

قال وزير التجارة الصيني قاو هو تشنغ يوم الاثنين إن من المرجح أن تبلغ الاستثمارات المباشرة غير المالية للصين في الخارج 1.12 تريليون يوان (161.19 مليار دولار) في 2016 بينما يبلغ الاستثمار الأجنبي المباشر في الصين 785 مليار يوان. وجاء في تصريحات قاو في مؤتمر والتي نشرتها الوزارة على موقعها على الانترنت أن الحكومة “ستدعم […]

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Iran Negotiated Boeing Plane Purchases At Half Price

One year ago, the airplane market was spooked by reports of “market tests” for Boeing 777 plane prices, when according to the CEO of Delta the company had acquired a used 777s for a paltry $8 million, a 97% discount from new Boeing 777-ER prices!


Prior to this report, in October, Delta CEO Dennis Muilenburg  raised more eyebrows when he said there was a “huge bubble” in used widebody aircraft, and that as a result the market was “ripe” for Delta to  buy used 777s, as he subsequently did for an unprecedented 97% price reduction.

CEO: I was wrong when I said used 777s were on market for $10M. It was actually $7.7M. We just signed a letter of intent to buy one.

— Delta News Hub (@DeltaNewsHub) December 17, 2015

Boeing’s late December decision to cut production of its 777 long-haul jet due to a drop in demand, confirmed that behind the stable industry facade, the underlying economics are far worse than most suspect, and that prices were set to plunge absent implicit government subsidies. Furthermore, with the Ex-Im bank subsidizing Boeing’s new plane purchases, it was next to impossible to obtain a clean “market test” for new Boeing airplanes.

Then, over the weekend, we got a glimpse into the real “price” of airplanes, when Iran said on Sunday it had negotiated to pay only about half the announced price for 80 new Boeing airliners in an order that Boeing had previously said was worth $16.6 billion. The sale includes 50 twin-jet, narrow-body 737 planes and 30 long-range, wide-body 777 aircraft. The first airplanes are scheduled for delivery in 2018, with the entire order being fulfilled over 10 years.

“Boeing has announced that its IranAir contract is worth $16.6 billion. However, considering the nature of our order and its choice possibilities, the purchase contract for 80 Boeing aircraft is worth about 50 percent of that amount,” said Deputy Transport Minister Asghar Fakhrieh-Kashan, quoted by Iran’s IRNA state news agency.

Then there is the question of how much funding the Ex-Im bank may have provided to Iran: when all is said and done, it is possible that the Persian nation ended up paying nothing out of pocket, and merely funded its purchase of Boeing airplanes with a generous loan from Uncle Sam.

As part of Iran’s return to a post-sanctions world, Boeing and Airbus both signed huge contracts this month to supply airliners to Iran, the first such deals since international sanctions were lifted under a deal to curb Tehran’s nuclear program.

Iran’s recent return on good terms with the US has meant few have benefited as much as Boeing. as replacing the Middle-eastern nation’s antiquated civil aviation fleet is one of the biggest economic opportunities of the 2015 accord to lift sanctions, negotiated President Barack Obama, who several years ago also imposed the same sanctions. Donald Trump has been a vocal critic of the pact, and his recent tweets have hardly benefited Boeing.

Even better news for Iran is that its need to replace its old planes comes at a time when Boeing, Airbus and smaller planemakers have all faced a downturn in orders, and are therefore expected to offer deep discounts, in this case roughly “half off” on new airplanes.

Meanwhile, Airbus’s contract to sell 100 jets to IranAir, signed last Thursday, would be worth $18-$20 billion at list prices, but the head of IranAir has been quoted as saying the value of the contract would not exceed $10 billion, again suggesting that the demand for new airplanes across the world has collapsed if the world’s two major aircraft producers are willing to offer half off terms to any marginal buyer.

The government of President Hassan Rouhani, a pragmatist, has pushed to finalize aircraft deals to show results from the nuclear accord with world power to end sanctions; the smart move also makes it unlikely that Trump will be able to undo the sanctions once financing commitments are in place with the Iranian nation, the proud host of brand new Boeing and Airbus planes. Ironically Rouhani faces criticism at home from hardliners over the cost of the purchases which could well be zero.

According to Reuters, Fakhrieh-Kashan also said on Sunday that IranAir may exercise an option to buy 20 more aircraft from ATR, a European maker of regional turboprops, in addition to a planned firm order of 20. A team from the planemaker would arrive in Tehran next week for final talks. “The final round of talks will be held with ATR representatives (next) week and we expect the IranAir contract to be signed … in the following week,” he told IRNA. “The purchase of 20 planes has been finalised and Iran may buy 20 more planes,” said Fakhrieh-Kashan, adding that the contract for 20 planes was worth less than $500 million. It was not immediately clear if the sticker price for the order was $1 billion an higher.

Iran’s orders aside, with global demand for airplanes – pardon the pun – crashing, it is not clear how this core component of exportable US Durable Goods, and US GDP, will fare in a year when the USD is already soaring and set to hit US exports significantly. One thing we do know, however, is that if and when GDP prints soft in the next quarter or two, the “economists” will just blame the weather as they always do, or perhaps just blame Trump.

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Obama confident he could have won the White House again

Agence France Presse
Mon, 2016-12-26

WASHINGTON: President Barack Obama says he could have been reelected for a third term and that the nation still largely embraces his political vision despite last month’s election of Donald Trump to succeed him.
The US leader’s remarks were made in an interview posted on the podcast “The Axe Files,” produced by CNN and the University of Chicago.
Obama, who winds up his second and final term in office in just over three weeks, said he believes the American public still supports his progressive vision, despite having voted for Trump — his political opposite.
“I am confident in this vision because I’m confident that if I had run again and articulated it, I think I could’ve mobilized a majority of the American people to rally behind it,” Obama tells his interviewer, former senior adviser David Axelrod, in the most recent of several exit interviews he has been conducting.
He was philosophical and a little rueful about Democrats’ loss of the presidential election, when Hillary Clinton was defeated by Trump in a shock outcome almost no one predicted.
“Losing’s never fun,” he tells Axelrod, a political strategist who helped craft Obama’s winning 2008 presidential campaign and then followed him to the White House.
“I’m proud that I have tried to conduct myself in office to do what I think is right rather than what is popular, I always tell people don’t underestimate the public humiliation of losing in politics,” Obama said.
“It’s unlike what most people experience as adults, this sense of rejection.”
But he was also proud of the way the progress made in the two terms of his presidency, thanks to the “spirit of America,” especially evident in the younger generation.
“That spirit of America has still been there in all sorts of ways. It manifests itself in communities all across the country,” Obama said.
“We see it in this younger generation that is smarter, more tolerant, more innovative, more creative, more entrepreneurial, would not even think about, you know, discriminating somebody against for example because of their sexual orientation,” the president said.
“All those things that I describe, you’re seeing in our society, particularly among 20-year-olds, 30-year-olds.’
Despite the election of Trump — a Republican who appears set to put in place policies that will take the country sharply to the right — during his presidency “the culture actually did shift,” Obama told Axelrod.
“The majority does buy into the notion of a one America that is tolerant and diverse and open and full of energy and dynamism,” the US president said.
“The problem is, it doesn’t always manifest itself in politics.”

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Boj’s Kuroda Defends Yield Curve Control, says Policy Helping Japan Overcome Stagnation

Bank of Japan Governor Haruhiko Kuroda in a speech at Keidanren, Japan’s biggest business lobby on Monday, strongly defended the central bank’s yield curve control policy. He said that the new policy framework had kept Japan’s long-term interest rates from joining the uptrend in global yields and was helping the economy overcome stagnation.

Kuroda offered an upbeat view on the global economy, saying it was emerging from the doldrums as factory and trade activity picked up. He said the global economy seems to be entering a new phase and finally putting behind the negative legacy of the global financial crisis. He added that BOJ’s new policy framework will help maximize the benefits of global tailwinds for Japan’s economy.

Kuroda also shrugged off criticism regarding the bank’s 2 percent inflation target as being too ambitious. He said that the BOJ has enough policy ammunition to defend against future shocks to the economy only by accelerating price growth to its target.

“By implementing this policy framework in an appropriate manner, the BOJ can take advantage of the recovery momentum of the global economy to produce an even greater driving force for Japan’s economy,” he said in a speech at Keidanren, Japan’s biggest business lobby.

Kuroda’s remarks support the growing sense of optimism amongst BOJ policymakers on the outlook for Japan’s economy and stoke market expectations that the bank will hold off on expanding monetary stimulus in coming months.

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