Rusal chief joins in chorus of doom surrounding Russian economy

Russia won’t hit the bottom of its current recession until the middle of next year,  according to aluminium giant Rusal’s President Oleg Deripaska.”There is still a crisis and we can’t see the bottom yet and there are a lot of issues that need to be resolved… I don’t  think we will see the bottom for another nine months ,”  he told CNBC on Wednesday, in a week that saw both Fitch’s  and S&P confirm Russia’s negative rating at BBB- and BB+ respectively.
There were a plethora of issues that needed to be resolved before the economy would see any improvement, he argued, including the volatility in commodity markets, an over-reliance on state enterprises, government intervention and the inefficiency of  Russia’s debt markets and overall financial system. He also referred to “a few conflicts which need to resolve” —presumably Russia’s bombing campaign in Syria and activity by pro-Russian militants in Ukraine.
“It may happen that sanctions will never be lifted, but we would still be able to live. Russia would not die. The issue is how we can adapt and adjust our system and what we can do to stimulate the growth and the recovery,” he said.
On Thursday, ratings agency Standard and Poor’s (S&P) cuts its forecast for Russian GDP growth in 2015 from -2.6 percent to -3.6 percent. “The change reflects our expectations of a more prolonged weakness in domestic demand due to lower — and more volatile — oil prices, and tighter fiscal and monetary policies through end-2016, compared with our previous assumptions,” S&P senior economist, Tatiana Lysenko, said in a report. S&P also cut its growth forecast for 2016 to 0.3% from 1.9%
“We now anticipate a weakness in private consumption to extend into 2016, and only a marginal recovery in capital spending next year, helped by improved corporate profit margins and a slowdown in deleveraging,” she wrote.

Source: cnbc