So, a leap year. Will it be so in the economy?

03.01.2024 It's hard to say. The most important factor influencing it is the exchange rate of the US dollar (or rather the ruble against the dollar) is in too artificial conditions. Nevertheless, with the caveat "all other things being equal" and in the absence of "Black Swans" (and they are unlikely to deprive us of attention), let's think about what's next. It should be noted that the year will be divided into two parts: before March and after. Before the elections, the government will do everything possible to maintain "image" indicators (especially the US dollar exchange rate).

I am sure that by the end of the year the ruble exchange rate will fall below 100 rubles per dollar (that is, the American currency will exceed 100). For some reason, most experts allow the ruble to strengthen to 90-85 per US dollar. For the life of me, I don't see any reason. Foreign investments in the Russian economy have "sailed away" - and for a long time. Europe and the United States have imposed restrictions on Russian raw materials and goods - and are gradually reducing dependence on them. Yes, we have also reduced our dependence on imported goods, but we cannot create our own Apple, Samsung (or whatever you call them anyway), etc. in a couple of years. Parallel import in Russia is working - and quite successfully. Therefore, the trade balance will still be in deficit. Political instability and geopolitics will further weaken the ruble. After the elections, it is likely that the government will begin to weaken the measures taken earlier to support the ruble (especially the obligation of exporters to sell foreign exchange earnings). At the same time, I assume that by March the government will try to reduce the dollar exchange rate - this is an "image" indicator.

Inflation is not going anywhere - and will reach the 10 percent mark. Real inflation for the most important goods will be higher. Money that is not provided with goods is pouring into the economy. Hundreds of thousands of people, torn out of the real sector of the economy, now produce nothing, but previously receive unprecedented salaries for most of them (200-300 thousand rubles, or even higher). This creates increased aggregate demand, which spurs the development of production, but has an inflationary effect.

The key rate is likely to be reduced, but only slightly - to 12 percent or so. The management of the Central Bank, after all, is in good shape, and understands perfectly well that with today's rate, we are turning the country into one big microfinance organization with no prospects for growth. Nevertheless, it is dangerous to let the ruble float freely. A reduction in the key rate is excluded until March - it is necessary to hold the ruble before the elections. It is unlikely that it will be significantly reduced in the first six months. A good indicator of the prospects of the key rate is interest on bank deposits. Banks, I am sure, have insider information. Interest on deposits increases before the rate is announced by the regulator. In anticipation of a reduction in the rate, usually the interest offered on deposits is extended for a maximum of three months. Now banks, including the BEAC, offer interest on premium deposits, comparable to the key rate, for up to 6 months.

The Moscow Exchange index strongly depends on the dollar exchange rate. Everyone expects a slowdown in its growth rate - I agree. It will grow by 15 percent to 3,500 points. At the same time, the "dollar" RTS index is unlikely to rise by more than 10 percent. Geopolitics and unpredictability will hold back growth.

Like that. What you disagree with, write in the comments. In any case, an interesting year awaits us, filled with turning events in Russia and the world. Happy New Year, friends!

Tags: #economy