Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Business in Brief

GDP Growth Scenarios

MOSCOW (MT) -- The Economic Development and Trade Ministry submitted its scenario of social and economic development through 2004 to the government Wednesday, news agencies reported.

Deputy Economic Development and Trade Minister Arkady Dvorkovich said two alternate paths of economic development are given. The first envisages oil prices at $18.5 per barrel, which would underlie GDP growth of 3.8 percent in 2004.

Under the second, oil prices of $22 per barrel fuel GDP growth of 4.7 percent next year.

The ministry on Tuesday revised its forecast for 2003 economic growth from 4.3 percent to 4.5 percent, assuming oil prices at $25.5 per barrel.

The inflation forecast remains unchanged at 12 percent, Dvorkovich said.

War Won't Spoil Budget

MOSCOW (Prime-Tass) -- The 2003 budget will be met even if the U.S. begins a military operation against Iraq, Finance Minister Alexei Kudrin told reporters Wednesday.

The government is prepared for various possible economic developments in the event of a war. The Iraq factor has been taken into account by analysts who prepared the scenario of Russia's economic development, he noted, though it is difficult to forecast the oil price level this year.

CB: Forex Calm on War

MOSCOW (Prime-Tass) -- Major foreign currencies are not expected to fluctuate wildly during the war in Iraq, the first deputy Central Bank chairman Oleg Vyugin told reporters Wednesday.

He said that the range of the major currencies' fluctuations would not exceed 4 percent.

"The markets expect a rapid war," Vyugin said. "After the war, the euro is expected to remain almost unchanged against other currencies," he added.

As for foreign exchange market, players should not make drastic moves, Vyugin said.

He said that the situation on the market could change only if oil prices fell significantly.

In this case, everything would depend on the interest rates set by the European Central Bank and the Federal Open Market Committee.

$60Bln Reserves Seen

MOSCOW (Prime- Tass) -- The Central Bank has increased its 2003 year-end foreign exchange and gold reserves forecast to $60 billion, first deputy chairman Oleg Vyugin said Wednesday.

Before, the Central Bank expected its foreign exchange and gold reserves to rise by no more than $7 billion this year from $47.8 billion as of Jan. 1, 2003.

The bank's reserves stood at $54.6 billion as of March 7.

It stopped buying foreign currency on the foreign exchange market after March 5 and the market is currently self-regulating, he said.

Pensions in Eurobonds

MOSCOW (Reuters) -- The State Pension Fund has been buying the country's dollar-denominated debt over the past few months -- mostly bonds that mature in 2030 -- but not on the open market, fund director Mikhail Zurabov said on Wednesday.

"The Finance Ministry had a considerable reserve of the paper and we have bought it up. We have not affected the market," Zurabov told reporters. "The total volume of [the investment] is roughly 38 billion rubles ($1.21 billion)."

The fund is currently the only one in Russia dealing with the general public's money. It invests both in ruble- and foreign currency-denominated Russian treasuries but it is reluctant to put money in domestic bonds which are currently offering yields below inflation.

Last October, Deputy Finance Minister Bella Zlatkis said the pension fund planned to invest about 150 billion rubles ($4.8 billion) in various assets in 2002-2003, and 70 percent to 80 percent of those funds would be invested in corporate securities.

China Frets Over Meat

SHANGHAI, China (Reuters) -- China plans to send a team to Russia to try to head off imminent meat import curbs that may hurt Chinese firms and hit poultry and pork trade worth more than $100 million a year, an industry body said Wednesday.

"We would like to go to Russia to talk about the issue because their restrictions will have a huge impact on domestic companies," an official with China's Chamber of Commerce said, adding that no date had been set for the trip.

Russia said in January it would impose import quotas on meat products such as poultry, beef and pork from April 1 and they would be effective until the end of this year.

China's exports to Russia would be capped at 3,100 metric tons.

In 2002, China exported 32,000 tons of poultry worth $309 million and 80,000 tons of pork worth $93 million to Russia, officials said.

MOL, Yukos in Siberia

MOSCOW (MT) -- Hungarian oil and gas company MOL Magyar Olaj-es Gazipari on Tuesday said it has begun joint production with Yukos on an oil field in western Siberia, Dow Jones reported.

MOL has received all the necessary authorization to become a 50-percent owner of the project and has also concluded a deal with state pipeline monopoly Transneft to transport the oil.

Joint production on the Zapadno-Malobalik oil field is now around 19,000 barrels per day and is expected to reach 55,000 bpd by 2005.

$30M Health Loan

MOSCOW (Prime-Tass) -- The World Bank approved a $30 million loan for Russia's health reform implementation project in order to enable the government to speed up reforms of its health care system, the bank said in a statement Wednesday.

The project will help determine which changes to concentrate resources on and how to divide responsibilities between the federal government and the regions, the statement said.

Two regions -- the republic of Chuvashia and the Voronezh region -- will participate in the project, slated to cost $41.21 million. Russia will provide the $11.21 million not covered by the World Bank loan.

EBRD Lends $4Bln

LONDON (Reuters) -- The European Bank for Reconstruction and Development signed a record 3.9 billion euros ($4.14 billion) of new loans and investments in 2002, up 7 percent from 2001.

However, the EBRD said net profit after provisions dropped to 108.1 million euros from 157.2 million euros in 2001, and it warned 2003 would be vulnerable to continued uncertainty on financial markets.

Part of the decline in profits was due to a 38.3 million charge for non-qualifying hedges required under international financial reporting standards, which the bank said did not reflect its underlying performance.

Kievstar Profits Rise

MOSCOW (Prime-Tass) -- The pretax profit of Ukraine's Kievstar GSM mobile telephone operator increased to 390 million hryvnas ($73.1 million) in 2002 from 115.2 million hryvnas ($21.6 million) in 2001, Kievstar president Igor Litovchenko told reporters Tuesday.

In 2000, the company suffered losses of 25.3 million hryvnas.

Litovchenko said Kievstar has the highest profitability growth among all Ukraine's mobile telephone operators.

Kievstar has the largest subscriber base in the country, with more than 2 million subscribers in more than 300 cities and towns, he said, adding that Kievstar's network covers about 40 percent of Ukraine.

120 Scania Bus Output

MOSCOW (MT) -- Sweden's Scania Peter, part of Scania AB, plans to produce 120 buses at its plant in St. Petersburg in 2003, up from 28 last year, managing director Goran Carlander said Wednesday, Dow Jones reported.

The buses are priced around $150,000 each, he said. Scania has the capacity to produce 400 buses a year at its $7.5 million plant in St. Petersburg.

Carlander said Scania plans gradually to increase production, and sees high demand for buses in Russia.

For the Record

The optimal number of stock exchanges in Russia would be 4-5, Russia's Federal Securities Commission Chairman Igor Kostikov told Itar-Tass Wednesday. Once there were 135 stock exchanges in Russia and now there are 11, but that is still too many, he said. (Prime-Tass)

Domestic meat prices will not be affected by the introduction of quotas for beef and pork on April 1, Agriculture Minister Alexei Gordeyev said Wednesday. (Prime-Tass)