Front Matter Page
IMF Country Report No. 17/198
RUSSIAN FEDERATION
SELECTED ISSUES
July 2017
This Selected Issues paper on the Russian Federation was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with the member country. It is based on the information available at the time it was completed on June 19, 2017.
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Front Matter Page
RUSSIAN FEDERATION
SELECTED ISSUES
June 19, 2017
Approved By
European Department
Prepared by Alexander Culiuc, Gabriel Di Bella, Oksana Dynnikova, Zoltan Jakab, Annette Kyobe, and Marzie Taheri Sanjani.
Contents
RUSSIA’S NON-COMMODITY EXPORTS: WHY THE MUTED RESPONSE TO THE RECENT DEVALUATION?
A. Introduction and Summary
B. Export Elasticities During Terms-of-Trade Driven Depreciations
C. Trading Partner Growth
D. Market Access
E. Quantifying Structural Transformation
F. Outlook and Policy Implications
FIGURES
1. Russia’s exports composition and competitiveness
2. Estimated Elasticities with Respect to the REER
3. NPL evolution (p.p. change since 2014 Q1)
4. Export Commodity Prices and Partner Growth
5. Trading Partner Growth and Manufacturing Exports in Large EMs
6. Consequences of Russia’s Dependence on Neighbouring Markets
7. Regional Trade Agreements: Russia Against other EMs and other Large Economies
8. MA-OTRI Index of Restrictions Faced by Exporters
9. Manufactured Exports Growth Decomposition
10. EXPY Levels and Changes for Large EMs
11. EXPY for Manufactured Goods: Levels and Changes for large EMs
TABLE
1. Panel Estimations of Elasticities of Manufactured Exports with Respect to the REER
ANNEX
I. Defining Manufactured Exports
II. Export Growth Decomposition: Methodology and Extended Results
References
EVALUATING FISCAL RULES?
A. Introduction
B. Russia’s Fiscal Rules
C. Simulations of Fiscal Rules
BOXES
1. Russia’s Previous Fiscal Frameworks
2. Determining a Benchmark Oil Price
FIGURES
1. Fiscal Rules or Lack Thereof: Central Government Revenue and Expenditure
2. Procyclical Fiscal Policies and Insufficient Savings
3. Counter Factual: Deviations from Actual Outcomes
4. Evolution of Net Debt: Oil Shock Scenarios
APPENDIX
I. Table and Figures
ANNEXES
I. FSGM for Russia
II. Russia’s Proposed Oil Price Benchmark
FISCAL FEDERALISM AND REGIONAL PERFORMANCE
A. Introduction
B. Russia’s Fiscal Federalism in Context
C. Fiscal Federalism at Work: Achievements and Challenges
D. Conclusions and Issues for Discussion
FIGURES
1. Features of Russia’s Fiscal Federalism
2 Own Fiscal Revenues, Per Capita Income and GRP Composition
3. Federal Transfers and Per Capita Income
4. Federal Transfers and Accumulation of Factors of Production
5. Federal Transfers, Public Sector Expansions and TFP Increases
TABLES
1. Definition of Variables
2. Regressions for Bilateral Regional Per Capita GDP Growth Correlations
3. Regressions for Bilateral Regional Per Capita GDP Growth Correlations: Results
4. Federal Transfers in a Simultaneous Equations System
5. Federal Transfers in a Simultaneous Equations System: Results
APPENDIX
I. Fiscal Federalis—Further Details
References
PUTTING THE CURVE BACK IN RUSSIA’S PHILIPS CURVE: A TIME-VARYING APPROACH
A. Introduction
B. Avoid Bivariate Relationship and Adopt Multivariate Structural Model
C. Results—How Does the Philips Curve Evolved Over Time?
D. Conclusions
FIGURES
1. Inflation-Unemployment Trade-off
2. Bivariate Relationship—Subcomponents of CPI Inflation (1996Q1–2016Q3)
3 Bivariate Relationship—Various Inflation Measures (1996Q1–2016Q3)
4. Data
5. Time-Varying Parameters of Phillips Curve
6. Unemployment Rate and NAIRU
7. Inflation and Fitted Value
8. Phillip-Curve Estimations in Russia, AEs and EMs
ANNEXES
I. Identification and Bayesian Estimation
II. Fit of the Constant Time Coefficient Model
III. Time-Variation in Slope, Headline Versus Core
References