Today in Russian Business – June 30, 2009

The Economic Development Ministry has changed its forecast for the growth of GDP, predicting that the economy will shrink 8.5% this year instead of the 6-8% previously forecast.  The Ministry is more optimistic on inflation, predicting a rate of 12-12.5% instead of 13%.  Putin has ordered state banks to offer major corporations $13 billion in loans as Russia’s economy shrinks for the first time since 1998.  Putin has apparently said that Russia should be aiming for a deficit of 2-3% of GDP as opposed to the 7.4% planned.  As Russia’s second largest lender VTB struggles with bad loans, which have increased three-fold this year, the company may make 1,000 employees redundant.  The lender will make a loss this year.  Its chief financial officer has said the bank may require a second share issue next year if the state of the economy declines further.  Cherkizovsky Market is to be closed temporarily on government orders so that its owner Telman Ismailov can deal with sanitation and storage infringements.  In a show of technological innovation, Sberbank is planning to launch Internet-based retail share trade.