Another Day of Western-Russian Economic Warfare

·       Russia's annual economic growth slowed to 0.8% in the second quarter from 0.9% in the first quarter, Federal Statistics Service showed. (WSJ, 08.11.14).
·       The Russian add on food imports will add 1.8% to Russian CPI inflation over 2014-15. It’s unlikely that Russia will be able to handle the import ban without significant price controls. (FT, 08.12.14). Also BNP Paribas said  the food ban would add 1.8 percentage points to Russia's consumer price index over 2014-15.  Russia imported $17.2 billion of food from the countries targeted by the ban, of which $9.2 billion was in the affected categories. (Reuters, 08.10.14).
·       Analysts are downgrading their forecasts for Russian oil production growth because of Western restrictions on exports of technology and equipment. Morgan Stanley had assumed Russia would be producing an extra 250,000 barrels a day from its shale deposits and virgin Arctic fields by 2018 – which it says are now at risk. Barclays thinks production will fall in 2015. (FT, 08.10.14).
·       Russia will have a long way to go to fill the Norwegian salmon void. In 2013, Russia imported 130,000 tons of salmon from Norway, compared with 50,000 tons from Chile. Production in Russian fish farms, the association said, amounted to only 10,000 tons. (WSJ, 08.08.14).
·       According to the National Union of Milk Producers, the import bans will leave Russia short 2 million tons of milk by the end of this year. (MT, 08.08.14).
·       Sberbank was about 5% higher in early trading on Monday while VTB Bank was about 4% higher, while the Micex index is up around 1.8%.Why? Well, MSCI, which is one of the world’s largest index providers, said it would keep the two banks in its equity indexes in spite of EU and U.S. sanctions against Russia that have swept banks up in the net. (AP, 08.11.14).
·       U.S. Schlumberger oil-field-services company estimates the impact of Western sanctions against Russia on its earnings at three cents a share. (WSJ, 08.12.14).
·       E.ON, Germany's biggest utility, is expected to report a 14% t drop in first-half core earnings hit by subdued demand for energy in Europe, low wholesale power prices, and a weakening economy and currency in Russia. (Reuters, 08.10.14).
·       EU regulators on Monday said it was too soon to decide how much, if any, of a 400 million euro EU compensation fund might be paid out to help farmers. Polish fruit exports to Russia were valued at €340m last year and win the dubious honor of being the most exposed crops. The Netherlands (with dairy exports to Russia of €257m in 2013) and Finland (€253m) are at most risk on the milk and cheese front. Spain and Greece are vulnerable in relation to citrus, with stoned fruit such as peaches and nectarines. Germany and Denmark are the pork powerhouses with Russian pork exports worth €240m and €199m. Lithuania occurs with alarming frequency in the EU’s “danger list” thanks to its exports to Russia of beef (€31m), dairy products (€160m), fruit (€309m) and vegetables (€338m).( (Reuters, 08.11.14,FT, 08.08.14).
·       Lithuania's government said economic growth — seen at 3.4 percent this year — could slow by 0.2 percentage points because of Russian sanctions. (Reuters, 08.10.14).
 

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