Digest of headline news as of 7:10 p.m. Moscow time on February 12:
BUSINESS & FINANCE
*** VAT IMPACT ON INFLATION TO BE SHORT-TERM, NO REASONS YET TO THINK OTHERWISE - PUTIN
The impact of the VAT hike on inflation will be short-term, with no grounds as of yet to think otherwise, Russian President Vladimir Putin said.
"The government proceeded from the assumption - and I am inclined to think this will be the case - that this will be a one-off occurrence [the effect the VAT hike has on inflation, and subsequently bank interest rates] and short-term. And, going forward, indicators should not only level off, but also start to fall, including macroeconomic indicators," Putin said at a meeting with the public regarding the housing and urban environment national project.
*** ECON MINISTRY REVISES 2019 INFLATION FORECAST TO "BELOW 5%," SEES PEAK OF 5.5%-5.7% IN SPRING
Russia's Economic Development Ministry has changed the wording of its inflation forecast for 2019, allowing for a higher figure without actually specifying one.
The ministry now believes that by the end of 2019 "inflation will drop below 5% if the ruble's exchange rate remains stable, the ministry said in its traditional economic snapshot, published on Tuesday.
*** ECON MINISTRY KEEPS RUSSIAN GDP GROWTH FORECAST AT 1.3% FOR 2019
The acceleration of Russian GDP growth to 2.3% in 2018 from 1.6% in 2017 was due to one-off factors and is not sustainable, so economic growth is still expected to slow to 1.3% in 2019, the Economic Development Ministry said in its traditional economic snapshot, published on Tuesday.
"According to Rosstat data, GDP growth accelerated to 2.3% in 2018 from 1.6% a year earlier, which exceeded the estimates of the Economic Development Ministry of Russia made on the basis of the latest data, as well as the market consensus forecast. The acceleration of GDP growth rates was in large part due to one-off factors and is not sustainable. In the current year, economic growth is expected to slow to 1.3%," the report said.
*** PESKOV ON INCREASING CAPITAL OUTFLOW FROM RUSSIA: VOLATILITY UNAVOIDABLE
The Kremlin does not see capital outflow from Russia as something dramatic and believes that the rule of free capital movement applies to Russia amid macro-economic stability.
"Such things cannot be planned: this is an absolutely dynamic mechanism. The situation cannot be static, either, and volatility is unavoidable. Outflow can be smaller at one time and bigger at another. Everything depends on deals and acquisitions. [Capital] outflow is a broad notion, which should be kept in mind," presidential spokesman Dmitry Peskov said.
*** U.S. INVESTORS BUY AROUND 50% OF NEW GAZPROM DOLLAR-DENOMINATED BOND PLACEMENT - GAZPROMBANK
Foreign investors have been active with respect to Gazprom's new seven-year dollar-denominated Eurobond placement, with around 50% of bonds bought by investors from the United States, according to data provided by Gazprombank, one of the organizers of the deal.
Gazprom last week closed the book on requests for $1.25 billion in seven-year Eurobonds at a coupon rate of 5.15%, with settlements taking place on Monday, February 11.
*** HEAD OF GERMANY'S ECONOMIC AFFAIRS MINISTRY EXPECTING RESULTS FROM TALKS WITH RUSSIA ON GAS TRANSIT VIA UKRAINE
Results in talks with Russia on gas transit via Ukraine may be reached as early as this year, Germany's Minister of Economic Affairs and Energy Peter Altmaier told reporters in Berlin on Tuesday.
"I see good chances for negotiations to lead to specific results this year," he said.
*** OPEC RAISES NON-OPEC OIL SUPPLY FORECASTS BY 110,000 BPD FOR 2018, 80,000 BPD FOR 2019
Non-OPEC oil supply in 2018 rose 2.72 million barrels to 62.17 million barrels per day, compared with a previous growth estimate of 2.61 million bpd, OPEC said in its Monthly Oil Market Review for February.
The estimates were raised due mainly to supply by the United States, Britain, Malaysia and China. The U.S. was responsible for supply growth (2.24 million bpd) in 2018, as were Canada, Russia, Kazakhstan and Qatar (the latter left OPEC in 2019), Britain and Ghana.
*** RUSSIA HAS DISPOSED OF OVER 27 TONNES OF SANCTIONED FOOD SINCE AUG 2015
The Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor) disposed of 27,032 tonnes of foodstuffs supplied in violation of Russia's embargo between August 6, 2015, and February 12, 2019.
A total of 27,311 tonnes of prohibited products were seized. Most were plant products (26,211.1 tonnes); the rest were animal products (1,100 tonnes).
*** TRUST BANK ASSET RESOLUTIONS TOTALED 230 BLN RUBLES IN 2018
Asset resolutions by Trust Bank, which the Central Bank of Russia (CBR) has turned into a bank for distressed and non-core assets, totaled 230 billion rubles last year, the bank's head, Alexander Sokolov, told a press
"Otrkritie Holding accounted for around 100 billion rubles of those assets," Sokolov said. He said around 40 billion rubles was the repayment of the debt of companies related to the PIK Group and the businessman Sergei Gordeyev.
POLITICS & SOCIETY
*** TU-160 STRATEGIC BOMBER ALMOST NEW PLANE AFTER MODERNIZATION - PUTIN
The Kazan Aviation Plant has implemented the modernization of the Tupolev Tu-160 supersonic strategic bomber for the Russian Defense Ministry, and now Russia should seek to build a commercial supersonic aircraft, Russian President Vladimir Putin said.
"We have just implemented a brilliant project in Kazan: we have essentially created a new machine, the Tu-160 supersonic bomber, for the Armed Forces. And we have adjusted not only the carrier itself, but also the weapons for it. Everything runs like clockwork," Putin said at a meeting with the public in Kazan on Tuesday.
*** NEW PUTIN-TRUMP MEETING NOT BEING DISCUSSED AT THIS POINT - PESKOV
A possible new meeting between Russian President Vladimir Putin and U.S. President Donald Trump is not being discussed at this point, Russian presidential press secretary Dmitry Peskov said, adding that the ball is now in Washington's court.
"No meetings are being discussed at this point," Peskov told reporters.
The previous meeting was cancelled at Trump's initiative, he said.
*** KREMLIN DENIES RECEIVING U.S. PROPOSALS ON NEW AGREEMENT TO REPLACE INF TREATY
The United States has not invited Russia to sign a new agreement which would replace the Intermediate-Range Nuclear Forces (INF) Treaty, according to Kremlin spokesman Dmitry Peskov.
"No, these are media fabrications, nothing more," Peskov told the press on Tuesday.
"We have not received any proposals from the Americans for now," he said.
*** PESKOV DECLINES TO COMMENT ON RUNET BILL
Kremlin spokesman Dmitry Peskov has declined to comment on the bill stipulating security and sustainable operation of the Internet's Russian segment (Runet), which passed its first reading in the State Duma on Tuesday.
"Expert discussions are ongoing. The government, other experts, and parliamentarians are involved. So I'd rather not say anything on behalf of the presidential administration, the Kremlin, at this moment," Peskov told the press on Tuesday.
"Everything depends on the further progress of the debates, the way it [the bill] goes, and which adjustments are to be made," he said in response to a follow-up question about the proposals the Kremlin might make in relation to the bill.
***CLAIMS OF RUSSIA'S INVOLVEMENT IN GPS JAMMING IN FINLAND ARE FANTASIES - LAVROV
Russian Foreign Minister Sergei Lavrov has attributed claims of Russia's involvement in GPS jamming in Finland to the category of "highly likely" statements.
"There has been no probe, because it is not possible to investigative fantasies unsupported with facts. The entire thing belongs to the 'highly likely' category," Lavrov said at the joint press conference with the Finnish foreign minister on Tuesday.
*** U.S. RESOLUTION ON VENEZUELA COVERING UP POSSIBLE INTERVENTION, UNSC TO REJECT IT - LAVROV
The UN Security Council will not adopt the U.S. resolution regarding Venezuela, which aims to cover up Washington's plans of military intervention, Russian Foreign Minister Sergei Lavrov said on Tuesday.
He said the United States was lying when it said that the Russian resolution on Venezuela aimed to undermine U.S. "humanitarian actions."
"This is an attempt to distract attention from the fact that the U.S. draft resolution actually aims to cover up the plotting of provocations, in which humanitarian supplies will be used as a way to destabilize the situation in Venezuela and a pretext for an all-out military intervention," Lavrov said at a press conference in Moscow on Tuesday."As you understand, the Security Council will never make this decision," he said.
*** MOSCOW BACKS MEXICO'S, URUGUAY'S INITIATIVE ON LAUNCHING DIALOGUE IN VENEZUELA - LAVROV
Moscow supports Mexico's and Uruguay's efforts toward settling the situation in Venezuela, Russian Foreign Minister Sergei Lavrov said.
"Regarding the political aspects of the situation in Venezuela, we have been in support of Mexico's and Uruguay's initiative to provide preconditions for a nationwide dialogue involving all Venezuelan political forces from the very beginning," Lavrov said at a news briefing in Moscow on Tuesday.
*** MOSCOW BELIEVES PALESTINIAN MOVEMENTS SHOULD ACT AS ONE IN TALKS WITH ISRAEL - LAVROV
Moscow believes that Palestinian groups could unite on the platform of the Palestine Liberation Organization for negotiations with Israel, which would deprive those who oppose the idea of a settlement of their arguments, Russian Foreign Minister Sergei Lavrov said.
"We understand that this [the coordination of the Palestinian groups' positions in talks with Israel] can and should be done on the platform of the Palestine Liberation Organization. We have no doubt that the very announcement that unity among the Palestinian ranks has been restored would knock the trump cards out of the hands of those seeking to destroy the foundations of a settlement," Lavrov said at a meeting with representatives of Palestinian groups and movements in Moscow on Tuesday.
*** U.S. 'DEAL OF CENTURY' FOR MIDDLE EAST TO DESTROY EVERYTHING DONE TO DATE - LAVROV
The United States-proposed "deal of the century" for the Middle East peace process would destroy everything that has been done so far in the region, Russian Foreign Minister Sergei Lavrov said.
"Our American partners have come up with categorically new ideas to solve the problem and have been promising for more than two years to propose some 'deal of the century', but it's clear that the information available enables us to assess this 'deal of the century' as one that would destroy everything up to this point," Lavrov said at the start of a meeting with representatives of Palestinian organizations on Tuesday.
*** RUSSIA MIGHT REVIEW TALIBAN'S STATUS AT SOME POINT - KABULOV
Russian Special Presidential Representative for Afghanistan Zamir Kabulov has not ruled out a revision of the status of the Taliban movement (banned in Russia) by Moscow but said that won't happen immediately.
"As for a review, it is not on the current agenda. There should be phased progress and the issue will be raised at some point depending on the actual conduct of the Taliban in the course of national reconciliation," Kabulov told the press on Tuesday.
He also said it is time that the sanctions against the Taliban were lifted.
"We are basically ready, but a consensus is needed. There are 15 members of the [UN] Security Council and five permanent members. If we agree, then it's evidently the right time," Kabulov said.
*** RUSSIAN FOREIGN MINISTRY DEEMS U.S.-TALIBAN TALKS TO BE NECESSARY
Moscow backs the talks between the Taliban movement (banned in Russia) and the United States on the subject of Afghanistan, Russian Special Presidential Representative for Afghanistan Zamir Kabulov told the press on Tuesday.
"We support this process because it is necessary. It is hard to talk about a settlement in Afghanistan and further steps without reaching an agreement between the United States and the Taliban movement," Kabulov said.
*** RUSSIAN ARMY SHOULD PREPARE FOR BROADER RANGE OF MILITARY CONFLICTS - SHOIGU
The range of military conflicts has been broadening in the world, and the nature of hostilities has been drastically changing, which heightens requirements for the Russian army's command, Defense Minister Sergei Shoigu said.
"Requirements for commanders, heads of military commands, and their expertise are growing year after year. This is caused by a number of factors. First of all, the range of military conflicts for which the Armed Forces must be prepared is broadening," Shoigu said in his opening remarks at an operation-and-mobilization meeting of military commanders on Tuesday.
*** JEHOVAH'S WITNESSES NOT PERSECUTED FOR BELIEF, PENALIZED FOR ILLEGAL ACTIVITY - LEBEDEV
The court ban on the activity of Jehovah's Witnesses in Russia is not an act of religious persecution; the sole reason is their violation of Russian laws, Russian Supreme Court Chairman Vyacheslav Lebedev told the press on Tuesday.
"Nobody is being persecuted for religious reasons. The organization has been banned for activity which is against the law. Revoke the law and there's no problem," Lebedev said.
*** AZERBAIJANI PARLIAMENT UNANIMOUSLY RATIFIES CASPIAN STATUS CONVENTION
The Azerbaijani Milli Mejlis (parliament) endorsed the convention on the Caspian Sea's legal status at its plenary session on Tuesday, an Interfax correspondent reported.
"The convention was signed on August 12, 2018, and this is a very important document which meets the national interests of the Caspian states, including Azerbaijan," Milli Mejlis First Deputy Chairman Ziyafet Asgarov said at the session.
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