The expert commented on the comparison of the Russian economy with the situation in the United States in the 1980s

© RIA Novosti / Vladimir Traveloperator in photobacteria banknotes and coins of Russia. Archival photoThe expert commented on the comparison of the Russian economy with the situation in the United States in the 1980s© RIA Novosti / Vladimir Traveloperator the image Bank

The current situation in the Russian economy and the development of the American economy in the first half of the 80-ies of XX century, similar from the point of view of the challenges for public policy, told RIA Novosti expert group research and forecasting ACRES Dmitry Kulikov.

The Minister of economic development of the Russian Federation Maxim Oreshkin previously compared the situation in the Russian economy with the development of the American economy in the first half of 1980-ies, when the U.S. had achieved low and stable inflation, and this opened the way for positive credit cycle, which lasted 27 years.

«The economy of Russia now and the USA in the 80s can hardly be considered very much alike. But in terms of challenges to state policy there are similarities,» — said Kulikov.

He explained that Paul Volcker, former head of the U.S. Federal reserve, and his uncompromising tough interest rate policy then, in the 80s, has attracted a new level of trust and attention to the fed’s actions and contributed to a sharp decline in inflation and inflation expectations. But at the same time not let short-term recession, which is sometimes called the «Volcker recession».

«Obviously, the Bank of Russia takes into account this well-known and controversial experience, and, in General, while being more flexible than the fed in the 80s» — the expert believes.

The economy and debt

Oreshkin noted that, based on key indicators, Russia’s economy is stable, inflation according to the latest data was at the level of 3.3%. It is expected that in the next three years economic growth will not be below 2%, inflation is at the target level which was designated TSB (near 4%). According to the Minister, the overall low level of debt allows us to expect a long credit cycle, and the task of the government and the CBR is that it was positive for economic growth.

According to Kulikova, Russian borrowers in the current environment of low inflation have the ability to increase the debt level, for example through Bank lending, but too rapid growth of loans may become a threat to the economy.

«Persistently low inflation reduces inflationary expectations and, consequently, long interest rate. Therefore, the maintenance of the same in nominal expression of the debt requires the use of a smaller portion of current income. In the end, do the amounts of debt if necessary to increase,» — said the expert of an ACRE.

«For example, in the Annex to the Bank loans of the population: at the end of 2016-2017 rate drops by 4-6 percentage points depending on the term, because of this loan portfolio could potentially grow even 1.7-1.8 trillion rubles (which is around 15% for two years). The share of current income going to the service would not have changed,» he continues.

Thus, according to Kulikova, you have to understand that if the debt is too fast – it is also a threat. Thus, research based on international experience show that if one-two years the growth in the value of debt leads to an increase by 4-5 p. p. of share used on services operating income in two of three cases followed the financial crisis.

«In long-term debt relations are developing with the growth of confidence in the contractors and with the advent of financial instruments and services that allow you to insure various risks of mutual relations», — concluded the Agency interlocutor.

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