Milov on Peak Crisis

Vladimir Milov posted this on the Democratic Choice blog today, and it was re-published on Ekho Moskvy. I thought it was worth sharing in full:

After some delay Rosstat published its data on the economic indicators for December. As predicted the December figures were much worse than the previous months:

The fall in retail trade turnover in December was negative 15.3%, a record for the year and much worse than in November (negative 13.1%), despite the pre-New Year shopping season! As I said: “December will be even worse than the previous months.” The hopes of the optimists on New Year bonuses and sales growth did not materialize.

The fall in real wages in December was negative 10%, and is also worse than in November (negative 9%).

Falling investment in December was negative 8.7%, and is a serious deterioration compared with October-November (then was a more moderate negative 5%, which gave officials an excuse to talk about “the passing of the bottom of the crisis”).

Falling industry also accelerated: negative 4.5 in December (compared to negative 3.5 in November), including manufacturing — negative 6.1 in December (compared to negative 5.3 in November). This is the worst performance since the summer.

It is clear that the earlier rhetoric of our government about “passing the bottom (peak?) of the crisis was complete bullshit. It is no accident that [Economy Minister] Ulyukayev at the Gaidar Forum [two weeks ago] said that we have to wait until 2030 for the good life.

All this is understood by the population: here’s a look at a fresh chart from Rosstat (from here, showing that after last year’s lulling from the authorities about the fact that “we have already passed the bottom” people have understood perfectly, and the consumer confidence index is now confidently headed for “half of the sixth”.

Consumer price index (2007-2015)
Consumer Price Index

As I see it, the government no longer speaks about the “passing of the bottom [of the crisis]”, but prefers to talk about the fall of the ruble.

There should be no illusions: the year 2016 will only get worse, because there will be less and less money, and the authorities have not come up with an anti-crisis plan (hint: you can read about what measures should be taken to over come the crisis here). The Reserve Fund has fallen below $50 billion for the first time in 4 years — in rubles it is now 3.6 trillion, which the budget deficit this year is planned in the amount of 2.3 trillion, but with an average annual oil price of $50 [a barrel], and if it [oil] will be $35 [a barrel] then the deficit will be more than 4 trillion rubles, otherwise we can expect a further depreciation of the ruble. I for one think that it is time for the Medvedev government to give way to an anti-crisis government of national confidence.

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