Business

Turkeys currency has managed to interrupt its catastrophic fall by rebounding six per cent this morning.

The lira has mitigated two days of selling that saw its value plunge nearly 14 per cent on Friday and a further 6.3 per cent yesterday, clawing back six per cent to be worth 6.5 lira to the dollar, from 6.88 yesterday.

But the currency has still lost a quarter of its value just this month, while it stood at 3.7 lira to the dollar at the start of this year.

Read more: Turkey has 'only days' to resolve lira crisis, analysts warn

Turkeys President, Recep Tayyip Erdogan, earlier this week claimed the country was under economic “siege” as the lira shedded value, dragging down the MSCI world equity index with it.

Analysts yesterday recommended Turkey take a variety of actions to curb the currencys fall, such as “orthodox” fiscal policies and mending relations with the US, where the Trump administration is pushing for the release of detained pastor Andrew Bunson.

Actions taken today appear to have helped, with trading group XM crediting Turkeys central bank with some positive actions.

“After trading in risk-off mode over the past few sessions amid worries that the crisis in Turkey could spill over into other economies, markets appear to have calmed down a little on Tuesday,” said XM investment analyst Andreas Georgiou.

“The Turkish central bank took some steps to enhance liquidity yesterday, which although falling short of addressing the bigger issues in the troubled economy, still appear to have done the trick for now – providing some much-needed relief to the Turkish lira and risk-sensitive assets.”

However, he added called the small rise “a breather in the bigger picture”, and analysts are looking out for more concrete action from Turkish authorities, both on monetary policy and on fixing their relations with the US.

Kit Juckes, macro strategist at Societe Generale, said: “The diplomatic standoff remains intact as the US awaits a response to their ultimatum to release Pastor Andrew Brunson. It seems highly unlikely that market confidence can be restored in the absence of tighter monetary policy too.”

Read more: Turkish lira drops to new record low overnight

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Business

David X Prutting/Shutterstock

Jerry Seinfeld has no regrets about turning down an NBC offer of $5 million for one more season of his Seinfeld comedy show.

“It was the perfect moment, and the proof that it was the right moment is the number of questions youre still asking me about it,” Seinfeld said in an interview with the New York Times magazine. “The most important word in art is “proportion.” How much? How long is this joke going to be? How many words? How many minutes? And getting that right is what makes it art or what makes it mediocre.”

The 64-year-old Seinfeld has just released the 10th season of Comedians in Cars Getting Coffee. He was asked about the recent banishment of Guardians of the Galaxy director James Gunn for what he claimed were some old jokes on Twitter.

“I didnt read the jokes, but if theyre jokes, it doesnt matter,” Seinfeld said. “I guess Roseanne Barr thought she was being funny, but it wasnt funny — and if its offensive and not funny, then its not a joke. But any comedian that doesnt understand that dynamic, youre finished anyway.”

Seinfeld claimed he has never apologized for a joke. No. Jokes are not real. People assume that when you say something that you believe it. Its purely comedic invention. You know, I do this whole bit about Pop-Tarts and how much I love them. I dont love Pop-Tarts. Its just funny. Its funny to say it, so I say it.”

Original Article

Business

For the past seven-plus years, as Greeces debt crisis plays out in public in painful, blow-by-blow detail, the European body charged with its rescue has conducted its affairs away from prying eyes.

Now there are growing calls to change the way the Eurogroup operates.

Critics of the gathering of finance ministers from the 19 countries in the euro and officials from the European Central Bank and European Commission accuse it of acting like a private club. They want greater transparency in keeping with the influence it wields over issues of vital importance to many of the eurozones 350 million citizens.

“The euro crisis changed everything,” said Leo Hoffmann-Axthelm, an advocacy coordinator with the NGO Transparency International. “The Eurogroup should be institutionalized, with proper rules of procedure, document handling and a physical address with actual spokespeople. We can no longer be governed by an informal club.”

Although it can impose tough conditions for bailing out struggling member countries or rescuing banks, it publishes no official minutes, has no headquarters, and the people who function as its secretariat have other day jobs. Its public face is a eurozone finance minister, who works for no salary: The current president is Jeroen Dijsselbloem, a Dutch Socialist with conservative views on fiscal matters.

Legally, it is governed by a single sentence in Article 137 of the EU treaty which says “arrangements for meetings between ministers of those Member States whose currency is the euro are laid down by the Protocol on the Euro Group.”

Emily OReilly, the EUs ombudsman, is among those calling for reform. While she credits Dijsselbloem for his efforts to peel back the curtain on Eurogroup proceedings, she said: “It is obviously difficult for Europeans to understand that the Eurogroup, whose decisions can have a significant impact on their lives, [isnt] subject to the usual democratic checks and balances.”

If minutes of its meetings were made public, outsiders might not like what they saw.

Indeed, when a group of citizens from Cyprus who disagreed with the terms of the 2013 Cypriot bank bailout took their case to the European Court of Justice, the courts responsewas that the Eurogroup is not “capable of producing legal effects with respect to third parties” because it is just a discussion forum.

Last year, Dijsselbloem used the ECJ ruling to justify the Eurogroup avoiding standard EU transparency rules, though he did commit to individual transparency requests on an informal basis.

But some of those who participate in Eurogroup meetings argue that its informality is precisely what makes it useful. The last thing they want is another bureaucratic EU institution, and if the Eurogroup were reformed out of existence, they say, a new version would pop up in its place, without the minimal accountability it currently offers in the form of meeting agendas and press conferences.

“Its the informal nature of the Eurogroup that makes it possible to have an open exchange that you will not find in more formal bodies,” said Taneli Lahti, a former head of cabinet for European Commission Vice President Valdis Dombrovskis. “This is crucial for policymaking, negotiating, finding agreements and understanding each other.”

German Finance Minister Wolfgang Schäuble, during a Eurogroup meeting in Brussels | Olivier Hoslet/EPA

“Its irreplaceable in value,” said Lahti, who is now the director of the Confederation of Finnish Industries but in his previous role accompanied four Commission vice presidents to Eurogroup meetings between 2010 and 2015.

This week, the Eurogroup met behind closed doors to discuss the latest chapter in the Greek story, but neither the Greek public nor people in the other EU countries funding the €86 billion bailout program — the third of its kind — got to follow the debate, which failed to produce a final agreement on debt relief.

Speak up

If minutes of its meetings were made public, outsiders might not like what they saw.

According to one senior official who has attended many Eurogroup meetings, a handful of people do nearly all the talking on Greece — the groups president and the ministers “from Germany, France, the Netherlands and Greece, plus the Commission, sometimes Italy.” Some ministers cant get a word in edgeways because the proceedings take place in rapid-fire English.

“Germany clearly puts pressure on a lot of member states,” added the official.

In a telling episode from the height of the Grexit fears in the summer of 2015, 18 ministers sat waiting in the EUs Council of Ministers until Dijsselbloem walked in flanked by ECB President Mario Draghi and the International Monetary Funds Christine Lagarde. The trio sat down and Dijsselbloem informed his fellow finance ministers that a decision on a new round of the Greek bailout had already been reached.

Michael Noonan, the finance minister of Ireland which had exited its own Eurogroup-approved bailout in 2013, shook his head. According to sources who were in the room, he then did something most members of the body avoid: He spoke up.

“As a finance minister, Im asked to make a decision of the [three officials] and I have nothing to go by,” he said. “How can I pass judgment?”

“Often the real decisions are taken in preparatory meetings,” said Maria Joaõ Rodrigues, a Portuguese MEP who specializes in eurozone governance. According to her, ministers hide behind expert views, but “if there was more transparency around final debates, ministers would be confronted with their own [national] public opinions.”

Many of the decisions are pre-prepared by a body called the Euro-area Working Group (EWG), made up of the chief civil servant from each national treasury department. It works as a second operational board of the European Stability Mechanism (ESM) — the eurozones bailout fund. While it takes minutes, it doesnt publish them nor, as the EU ombudsman has noted, does it have any formal operating procedures.

No intellectual exchange

The Eurogroup met for the first time at Château de Senningen in Luxembourg on June 4, 1998, with the task of coordinating economic policy during the countdown to the launch of the euro. Twelve years later, with a financial crisis engulfing the eurozones weaker economies, it launched a series of sovereign and bank bailouts for Greece, Spain, Portugal, Ireland and Cyprus.

The crisis transformed it from a talking shop into the last line of defense for the euro and dozens of major European banks. Together with the ESM — which also exists apart from the EU treaty and standard operating procedures, and has the Eurogroup participants on its board — it doled out more than €250 billion in emergency loans. Without the intervention of the Eurogroup, the sovereign debt crisis could have ended in catastrophe.

Nobody is more scathing about the body than Yanis Varoufakis, who as Greek finance minister battled against Eurogroup-mandated reforms until he fell out with Prime Minister Alexis Tsipras.

Whatever happens next, the Eurogroups future is likely to depend on increasing the levels of trust and transparency.

“There is no intellectual exchange of any substance whatsoever,” Varoufakis said, likening the Eurogroup to a policy-laundering system used by the European Commission, ECB and International Monetary Fund to give their austerity policies an air of democratic respectability.

Other European officials believe the Eurogroup has grown more disciplined and productive under the leadership of Dijsselbloem than it was under his long-serving predecessor Jean-Claude Juncker, who is now president of the European Commission. In the Juncker era, when he was prime minister and finance minister of Luxembourg, “when you started a meeting, it wasnt clear what the agenda was,” said one official from that period, adding that discussions were very long and “confusing.”

Juncker admitted to a meeting of the federalist European Movement in May 2011 that he viewed it as necessary to lie to the public about certain aspects of eurozone management, and that the Eurogroup was a place for “secret, dark debates.”

Avoiding scrutiny

Dijsselbloem, who declined to be interviewed for this article, may not hold the presidency much longer. His Labor Party was crushed in Marchs Dutch election and he is likely to leave office once a new coalition government is formed. There are few rules on the succession process: By convention, it is run by a finance minister from the currency bloc, but the protocol that governs the group requires only that it elect a president every two-and-a-half years.

Whatever happens next, the Eurogroups future is likely to depend on increasing the levels of trust and transparency. Dijsselbloem has moved in that direction, including issuing annotated agendas and written statements after its meetings.

Dijsselbloem, during a hearing by European Parliament Committee on Economic and Monetary Affairs | Stephanie Lecocq/EPA

Dijsselbloem, during a hearing by European Parliament Committee on Economic and Monetary Affairs | Stephanie Lecocq/EPA

Frances new President Emmanuel Macron has floated a much more ambitious reform of the eurozone that envisions a cross-border finance ministry, and France and Germany have a joint proposal in mind. On May 31 the Commission is expected to publish its own “reflection paper” on issues such as a common eurozone budget and whether to mutualize the public debt of individual eurozone countries, according to those involved in drafting the paper.

If any of these ideas prosper, the Eurogroup — which was extended unusual leeway to operate informally and out of sight to help it defend the euro in times of crisis — wont be able to avoid greater scrutiny.

But, as one Commission official argued privately, the consequence of reform could just be that the same influential group finds another format to hold its informal talks. “That wouldnt be good for the overall result,” cautioned the official, who argued that a group as large and diverse as the EU will always need a safe space to talk in private.

In general terms, the European Commission sees the Eurogroup as a problem for national ministers in the Council of the EU to resolve. “Its a Council formation, for better or worse,” said a senior Commission official. “Its for them to decide how they organize themselves.”

Original Article

Business

LISBON — Surveys often show the Portuguese rivaling Greeks and Bulgarians for the title of Europes gloomiest people. Yet since Prime Minister António Costa took office 18 months ago, it feels like the land of fado and saudade has been popping happy pills.

Costa has overseen a return to robust economic growth after a decade of recession and stagnation.

The budget deficit is the lowest since democracy was restored in 1974. Unemployment stands in single figures for the first time since the eurozone debt crisis engulfed the country in 2010. Tourism and exports are booming.

The European Commission last month agreed to remove Portugal from its excessive deficit naughty list, where Lisbon had lingered since 2009.

Adding to the party atmosphere, this football-obsessed country was crowned European champion for the first time last summer; crooned its way to victory in the Eurovision Song Contest after 49 years of failure, and got its man placed at the head of the United Nations.

The latest Eurobarometer poll has 66 percent of Portuguese expressing satisfaction with the life they lead, double the rate four years before.

As the positive data rolls in, the government is coming under pressure from unions and the left to speed up a rollback of austerity measures.

“All this good news is starting to make me feel ill,” columnist Miguel Esteves Cardoso wrote in the daily Público newspaper. “We werent built to handle so much happiness.”

Costa too is having some difficulty digesting the surfeit of success.

As the positive data rolls in, the government is coming under pressure from unions and the left to speed up a rollback of austerity measures introduced by Costas center-right predecessor during the years of crisis.

“Its time to swap the bicycle for a motorbike, so we can speed up the recovery,” declared Arménio Carlos, leader of the CGTP-IN, the biggest union confederation, to crowds of cheering protesters Saturday.

Juggling act

Carlos led a “day of struggle” that brought thousands to the streets of Lisbon and Porto to demand higher wages and pensions, shorter working hours, an end to short-term contracts and a reversal of liberalized labor laws.

Arménio Carlos, leader of the CGTP-IN | Mario Cruz/EPA

“This government must not forget the sovereign will of a people that voted to demand a break with the policies of exploitation and impoverishment,” said Carlos, whose union is close to the Portuguese Communist Party (PCP). “This government has to listen to the workers and respond promptly to their problems.”

He pointed to the rising incidence of strikes to illustrate the unions evaporating patience.

The main teachers unions have declared a shutdown for June 21, in the middle of high school exams, unless the government meets demands that include freeing up salary scales and hiring more staff.

Magistrates are threatening to close the courts unless they get more money.

Public services ground to a halt on May 26 due to a strike by civil servants who promised “the struggle will continue” unless the government accedes to demands for higher wages, more overtime pay and a 35-hour maximum work week for all state employees.

Union demands are backed by the PCP and the radical Left Bloc party, whose support is essential to keep Costas minority Socialist administration in power.

“The government has made commitments on labor rights which have not yet been met,” Left Bloc leader Catarina Martins said at a recent weekend union rally. “The time has come to fulfill those fundamental promises to defend the workers.”

The left and the unions are flexing their muscles in an effort to secure concessions as the government prepares the 2018 budget, due to be presented in the fall.

In his two previous budgets, Costa successfully juggled measures to nurture growth and mollify leftist anti-austerity demands, while reassuring Brussels and Berlin that Portugal remains committed to fiscal prudence.

Vulnerable to shocks

Despite the increasing clamor, Costa and Finance Minister Mário Centeno insist they will continue the balancing act.

“We have to continue to be extremely responsible, like weve been up until now,” Centeno said last week, in response to calls for a spending spree.

“If we resist certain temptations that are being spread around, well end this parliament with all our economic indicators exceeding expectations,” Centeno said in a social media exchange with voters. He did throw a bone to the left in the shape of tax cuts for low-income workers.

The government is confident that, despite the grumbling, the far left is unlikely to provoke a crisis.

Opinion polls show Costas Socialists riding high with over 40 percent of voting intentions, while both parties to the left have lost ground since the last elections in October 2015.

Should there be new elections, 66.2 percent of voters would trust Costa to stay on as prime minister, according to a poll published May 14 in the Correio da Manhã newspaper.

Portuguese Finance Minister Mario Centeno | Patricia De Melo Moreira/AFP via Getty Images

Portuguese Finance Minister Mario Centeno | Patricia De Melo Moreira/AFP via Getty Images

Despite the spate of good news, the government knows Portugals economy remains fragile and vulnerable to external shocks. It wants to use the recovery to cut the national debt, which at 130.4 percent of gross domestic product remains the third highest in the European Union.

Centeno aims to cut the debt ratio by 2.5 points this year. With that he hopes to persuade the three main international rating agencies to lift their assessment of Portuguese bonds above “junk” level, easing borrowing costs and giving the government more financial wiggle room.

Optimistic Portuguese

Its not just the Portuguese whom Centeno is making happy.

German Finance Minister Wolfgang Schäuble — who barely a year ago warned that the Socialists fiscal laxity was pushing Portugal toward a new international bailout — now hails Lisbons progress and dubs Centeno the “Cristiano Ronaldo” of EU finance ministers.

Praise from the eurozones fiscal-hawk-in-chief has fueled speculation — rife in Lisbon — that Centeno is in line to replace Dutchman Jeroen Dijsselbloem as president of the Eurogroup of finance ministers.

Costa, meanwhile, says the country can handle more good news.

Suddenly optimistic Portuguese are now dreaming of Cristiano Ronaldo continuing the winning streak in the World Cup next year.

“There are those who say weve had too much good news,” Costa told a party rally earlier this month. “Unfortunately, the country has been through such bad times that we need a lot of good news before the country can regain its composure and confidence.”

Portuguese year-on-year growth hit 2.8 percent in the first quarter, according to Eurostat. Theres talk in Lisbon that the annual rate could top 3 percent this year for the first time since the 1990s.

Exports are set to get a boost from Volkswagens giant Autoeuropa south of Lisbon, which already represents 1 percent of Portugals GDP, and is set to increase production by 20 percent this year as a new model comes online, and could double its production by 2018.

Tourism revenues, which rose to a record €11.9 billion — or 6.4 percent of GDP — last year, are set to increase by a further 3 percent in 2017, according to the World Travel and Tourism Council.

Suddenly optimistic Portuguese are now dreaming of Cristiano Ronaldo continuing the winning streak in the World Cup next year, plus, of course, a repeat of Salvador Sobrals musical success at their first home-ground Eurovision.

Original Article

Business

President Donald Trump vowed to make America great again, pledging to pull the US out of each and every unfair trade agreement, and to even out the trade imbalance with each and every partner.

Trump has shaken the foundations of global trade by breaking deals and imposing tariffs on friend and foe alike. Those countries have retaliated with tariffs on American products, pushing the world closer to an all-out trade war.

RT Business takes a look at how we got here.

Read more

TTP

As soon as Trump took to the helm of the world's largest economy, he proved to be a man of his word. During his first week in office, the US president abandoned the 12-nation trade pact known as the Trans-Pacific Partnership (TPP) as part of his 'America First' agenda, saying that the deal "was designed for China to come in, as they always do, through the back door and totally take advantage of everyone."

TTIP

The Transatlantic Trade and Investment Partnership (TTIP), which had been negotiated between the European Union and the US since 2013 during the Obama administration, was next on the chopping block. Shortly after taking office, Trump halted talks on the deal, saying that international trade agreements hurt US workers and the country's competitiveness.

In April, Donald Trump said the US might rejoin TPP. The following July, Washington and Brussels announced plans to restart negotiations for an agreement similar to the TTIP. Though Donald Trump has changed his aggressive rhetoric toward some of America's trade partners, he has managed to unleash several full-scale trade wars across the globe.

NAFTA

The longstanding trilateral North American Free Trade Agreement, which came into force in 1994 to unify the US, Canada and Mexico, was challenged by President Trump as well. He pledged to renegotiate the deal or break it. In July 2017, the White House provided a detailed list of changes to the agreement. While the deal is at a standstill, the Trump administration opted to slap its neighbors with tariffs on steel and aluminum exports. The measure came into force on June 1.

Read more

© Emmanuele Contini / NurPhoto

Canada

Apart from a 25-percent tariff on steel imports and a 10-percent tariff on aluminum imports, Washington introduced export tariffs of up to 24 percent on Canadian lumber. The measure that came into effect in April 2017 targets several forestry corporations, including West Fraser Mills, Tolko Marketing and Sales, J.D. Irving, Canfor Corporation, and Resolute FP Canada. According to the US, the lumber companies are subsidized by the government, which is not considered to be fair.

Mexico

Steel and aluminum tariffs are still the only trade assault committed by the US against its southern neighbor. However, Donald Trump has repeatedly slammed US companies for basing their production facilities in Mexico. During his election campaign, Trump pledged to impose tariffs – in the range of 15 percent to 35 percent – on firms moving their operations to Mexico.

European Union

The bloc was slapped with the same metal tariffs on the same date as Canada and Mexico. Brussels introduced tariffs worth $3.3 billion against US products. Washington pledged to impose a 20-percent tariff on cars imported from the EU, while Brussels threatened additional tariffs on $20 billion worth of the US imports. So far, the bloc agreed to buy more US soybeans and LNG in an attempt to avoid further escalation of the trade conflict.

Read more

© Danish Siddiqui

China

Trump's trade battle against Beijing has been the fiercest. It started in late January with Washington imposing 30-percent tariffs on Chinese exports of solar panels and 20-percent tariffs on exports of washing machines. Later, as "a response to the unfair trade practices of China over the years," Washington placed a 25-percent tariff on more than 1,300 Chinese products, including flat-screen televisions, medical devices, aircraft parts and batteries. In response, Chinese authorities imposed tariffs ranging from 15 to 25 percent on 128 products it imports from the US. The list included aluminum, airplanes, cars, pork, and soybeans, as well as fruit, nuts, and steel piping.

In July, the Trump administration introduced 25-percent tariffs on Chinese goods worth $34 billion. Beijing immediately imposed retaliatory levies in the same amount on US imports. A second round of tariffs on imports worth $16 billion took effect earlier this month.

Apart from that, China – along with Russia, India, Japan and Turkey – was targeted with steel and aluminum tariffs. All the targeted nations filed complaints to the World Trade Organization (WTO) and introduced mirror measures.

For more stories on economy & finance visit RT's business section

Original Article

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Business

A list of white farmers whose lands are to be seized without compensation in South Africa has been published by the local minority rights group AfriForum. The government denies the accuracy of the list.

The group has uploaded the list of the next land-expropriation victims on its website. AfriForum said it obtained the list through the Department of Rural Development and Land Reform ministry, which has denied its veracity.

AfriForum claims the list of lands for expropriation includes 195 farms, and has offered to get in contact with affected parties to prepare for a joint legal strategy. The groups CEO told News24 that the document was “definitely being circulated” in the South African government despite the denials.

Read more

South African agricultural industry association AgriSA has said two farmers on the list had contacted it for protection. “By the way, some of those farmers were extremely agitated that they have now been exposed,” Agri SA President Dan Kriek said, as quoted by News24.

“They are extremely worried with the name of their farm on a list that they might be exposed towards… well anything… land invasion, squatting, whatever.”

The organization claims that AfriForums list is not fully correct. “Upon investigation by Agri SAs affiliates, it came to light that the list contained farms that are joint ventures that are co-owned by black people,” said Annelize Crosby, Agri SA's head of the Center of Excellence: Land.

The issue of land ownership in South Africa remains a delicate question, more than two decades after the end of apartheid. According to the government, 72 percent of private land is owned by white people despite whites being a minority in South Africa.

For more stories on economy & finance visit RT's business section

Original Article

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Business

This article originally appeared on the corporate website of Moscow accounting firm Awara.

Having successfully adapted to the sanctions onslaught and fueled by growing oil prices Russias GDP surged in real terms by 5.8% in the first quarter of 2018. But the Russian government has decided to downplay the success by reporting an understated GDP growth of merely 1.3% even in the face of a string of other excellent economic indicators.

The thing is, the nominal growth in Q1 was 8.2%. Nominal growth is reduced by the rate of inflation to give the so-called “real growth.” As the inflation for the period was 2.4%, this would give a 5.8% growth. Why then did the government decide to report the low 1.3%. We dont know if the government wants to play it safe or if they actually dont get it. Lets see how they reason it.

The idea with reporting “real growth” net of inflation is to show how much the economy has grown above the general increase of prices. But what then made the Russian government deduct 6.8% from the nominal figure instead of the 2.4% inflation rate? It is entirely possible that they merely blindly follow the faulty conventions of the international national economy accountants. According to the esoteric ideas of those accountants, you would strive to identify the physical output behind the actual monetary figures. And to do this, they not only deduct the general inflation rate but actually tinker with every product class to apply their fancy theories.

Now, a big part of the Russian Q1 GDP growth came from the rise of oil and gas prices without a corresponding rise in the volumes of the extracted resources. So, what our accountants did then, is to deduct the whole price rise from the GDP growth. The feat is performed by establishing a so-called GDP deflator, which is used for subtracting the actual growth with the part of growth that the accountants dont like. The deflator would normally be in line with inflation but was now set at a staggering 6.8%.

GDP is supposed to measure value not volume

What happened is that Russia raked in huge increases in oil and gas revenue, which indeed increased the GDP, but because the Russian statisticians cannot find the volume growth they discard it. That is as wrong as it could be. This approach totally ignores the essence of GDP, which is the total value of the goods and services produced in a national economy. Yes, value, not volume. Therefore, if the value increases, then that is a GDP increase. We understand, that you would deduct the general inflation from the increase to show separately the additional production as opposed to an increase in the general level of prices.

We may compare this, for example, with the situation of Germany getting increased revenue for exporting of its cars. You can bet that all the price increases on that directly corresponds with GDP growth. If nothing else it would be motivated by some hypothetical improvement in the quality of the car, say a new button on the backseat for tweaking the air conditioner.

In general, the quest to try to identify the physical volumes behind GDP growth is outdated as the bigger share of GDP anyway is in the service sector where the output at the end of the analysis is intangible and can really be measured only in monetary terms.

The good thing is that whatever the accountants have done to produce these artificially low growth figures, they cannot wish away the actual real-real growth. The fact is that the GDP grew 8.2% in the first quarter and is therefore so much higher than before. When we deduct the inflation from this we get the nice-to-know figure of how much the economy grew above inflation. Everything else is accounting speculation. Too bad, though, that this kind of official reporting hampers Russias investment appeal.

Strong economic indicators

All the other main economic indicators confirm our view that there has been in Russia strong growth with an accelerating trend. Industrial production in Q1 was up by 1.9% further reaching 3.2% by May.

In the period, exports increased by 26%.

Capital investments grew by 4.2 to 4.4% each month January through March.

Salaries surged ahead with a 12% nominal growth giving a hefty 9.5% inflation-adjusted growth. In the same time, real disposable income grew by 3%. Increased household purchasing power was confirmed by a 2.2% rise in retail sales. At the same time, unemployment stayed at record lows of 5%.

All these figures indicate a much higher GDP growth than the miserly official 1.3%. Quite a lot of imagination must have gone into conjuring up that magic deflator, which wiped out all the growth. Why?

Theres the American way or reporting, too

Russias self-effacing GDP reporting comes in marked contrast to the behavior of the US Government, which is known to use every trick in the book to make its failing economy appear stronger and healthier than it is. Just in April, Awara came out with a report titled “Signs that the US Debt-Fueled Economy Might Actually Collapse.” The report details the dubious accounting practices of understating inflation, inflating GDP growth figures, and making a large chunk of US national debt disappear from the records.

Business

This very well made film is very interesting because it shows how the Russians started a major industrial manufacturing project from scratch, and built it up over several years, much of it in great secrecy because it involved creating a domestic limousine for Russia's leaders.

Revealing insight into contemporary Russian manufacturing conditions. Full transcript of the 30 minute film follows below.

– It's strong, it's invincible, but at the same time it's kind.

– It's very easy to drive. It's responsive to acceleration and braking.

– Could you say that it's the safest car available today?

– I think so.

– So it could be stamped with Cleared by Federal Protective Service?

– Yes, it could.

The official state car. Every country with a car industry has one. In France, it's Citroën. In Germany, it's traditionally Mercedes, even though Angela Merkel prefers Audi. The current president of the US travels in Cadillac nicknamed The Beast. In Japan, all political establishment traditionally commutes in Nissan. This is not just a top-level publicity for the brand, this is a matter of national pride.

Yuri Chernenko, Head of Design at NAMI: "The idea of a car for the country's leader has always existed. Every auto manufacturers, every engineer wants to create this, because it's a top level, it's prestigious, it's beautiful and it's limitless.”

Legends around this project started popping up just as it was announced back in 2013. By the way, Kortezh is not the official name. It was invented by journalists. And indeed, no other car has attracted so much attention before its official premiere.

Igor Pospelov, Deputy Director of Security at NAMI: "Many people showed interest in it, from regular citizens to popular bloggers and news outlets. Everyone".

Every news story even remotely connected to this Russian project would spread like wildfire in the media. It was truly a hunt for a scoop.

Igor Pospelov: We've received inquiries from fake emails, like from the Ministry of Industry and Trade, asking for a report on the car with photos and everything. There were also brazen attempts to bribe our employees through social networks in exchange for them providing photos.

The job of designing and building the official state car was given to NAMI, the Central Scientific Research Automobile and Automotive Engines Institute which celebrates its 100th anniversary this year. The first question the designers had to answer was what this car should look like. There were a lot of different suggestions, from ultra modern and futuristic models to the timeless classics.

– This is one of the first sketches, showing the car in a classic look. As the foundation for the style development, we chose…

– Judging from these stripes, it was ZIS-110.

– Yes. We chose ZIS-110 because if you have a close look at Russian and Soviet car history, you see that ZIS-110 was the first Soviet car that in terms of style and structure was designed specifically for country leaders.

– But stylistically it was also based on American Packard?

– Sure. And American culture had a huge influence here. Many people compare it to Packard, but if you look inside a Packard, you'll find striking differences.

All Aurus cars are united into a single concept. The model range was inspired by the Kremlin towers. The limousine and sedan are Senat. The minivan is Arsenal. There's also Komendant, the future SUV.

The first impression — Aurus looks noble. Not flashy, not extravagant, but indeed noble. Actually, the car's exterior even shows some ascetic elements, like the taillights. In my view, the designers have accomplished the difficult task of creating an elegant, yet seemingly simple product. The Aurus cars are notable not only for their outer similarity.

The project is actually called EMP which stands for Unified Modular Platform. For the future production on a larger scale, the unification principle where the same components are used across the entire range is a must. Such is the reality of the global automotive industry.

Vadim Pereverzev, Chief Designer at Project EMP: It allows a reduction in time spent on developing the car, as well as the cost of manufacturing and the parts chain.

– Cost of the end product?

– Yes. That's the direction we chose. And since our goal wasn't just to create a single car, but rather a range of models, we started to build a unified modular platform which allowed us to build this model range based on standardized components.

Vadim Pereverzev, the chief designer at the United Modular Platform Project. His story is a good example of reverse brain drain. He used to work in the same position at one of the car companies in Italy. The sea, the sun, the euro.

– Why did you come back?

– I believe that this kind of project is worth coming back, not to mention that people should live in their home country.

– Where is it more interesting to work, in Italy or here?

– Here of course, because the project is very unusual, ambitious and challenging.

While the Aurus limo, for obvious reasons, won't go into mass production, remaining an exclusive product, the sedan will. Compared to the limo, it's one meter shorter, which also makes shorter its wheelbase. In its first design, the car looked much more like the legendary ZIS-110. That's what we heard at the test range from Denis Manturov, Minister of Industry and Trade, who was put in charge of creating this car from the first day of the project.

Denis Manturov, Deputy Minister of Industry and Trade: "The trunk was very sleek, basically a copy of the one on ZIS. But when we started doing aerodynamic testing, it had to go, because it was pulling up the rear part of the car. So what we see today is the aerodynamic solution found through a lot of pain and hard work".

– The question is can I give it a try?

– You can.

– You're driving.

– All right, let's go.

– Shall we?

– Sure.

– Denis Valentinovich, if it's not a secret, what was your first car?

– My first car was VAZ-2104.

– That's a station wagon, right?

– Right.

Back in 1987, 18-year-old Denis Manturov, who had just fixed his father's 2104, could hardly imagine that a quarter-century later the ministry whose head he would become would be charged with changing the face of Russian car industry through creating something that our country never had before, with the exception of maybe GAZ Chaika and ZIL.

Even in 2013, there was no end to the criticism of the project that hadn't even started yet.

"I'm sorry, so you want to say that here in Russia, using Russian parts, you can create a high-end car?! We don't have the technology! It has to be state-of-the-art, whether it's electronics, metalwork, finish or anything else. Where are you gonna get high-quality materials? Leather, glass, plastic… Who's gonna assemble it? Russians, really?"

Denis Manturov: "Many people asked me where we got the experts. It wasn't only those people who had been working at our automotive facilities and making their career at NAMI. We've also brought in guys who had worked for 10-15 years in the leading companies around the world. And this process of Russian professionals coming back shows again that these experts believed in this project and believed in those ambitious goals that, in the end, we made come true".

– Was it possible 10 years ago to build such a car?

– No. In all honesty, if you ask me, I'll say no.

– Why?

– You know, all in good time. First, we had to build a certain level of experience and competence. Now we have it.

The international experience was, of course, crucial. And it would be stupid not to use the cutting-edge tech of the automotive world. No one even tried to hide the fact that the engine design and tuning required the experience of engineers from German Porsche. Still, all of the technology were developed in-house.

The engine itself is a 600hp, 4.4 liter, twin-turbo, V8. Let's not forget that it's hybrid. There's also an electric motor that produces up to 122 horsepowers. And these specifications dictate probably the most prominent part of the exterior, this massive radiator grille. There are also two air intakes on both sides. Well, a big engine needs a lot of air.

For now, the engine is the same across the entire Aurus range. In the future, the heavy, armored limo will get a new, more powerful one, 6.6 liters, V12, 800 horsepowers, and also hybrid, with an electric motor.

To build our own engine, among other things, we had to learn how to properly cast its parts. That wasn't so easy. Who should be the contractor? To this day, many companies use the services of foreign companies because our country is not doing so good with casting. NAMI decided to master the casting themselves. In this cast shop, you can't see the usual spark showers or flows of glowing metal. The processes here go unnoticed or rather hidden from the eye. It all starts with 3D technologies like on any modern production.

Vyacheslav Dovbysh, Director of Center of Technologies at NAMI:

– This is a sand mold with the binder. It's regular sand.

– It's very soft.

– Yes, it's calibrated, well-dried.

This sand is used to make molds, just like it was done in ancient times, only in the 21st century this is a job for a 3D printer. It helps to save the most crucial thing—time.

Vyacheslav Dovbysh: "For example, if it's a very complex cast like a cylinder block or something like that, the first trial cast is done in two weeks. As recently as 5-6 years ago, it could take up to 6 months".

These molds are filled with liquid aluminum under pressure and against gravity— from the bottom up. Because of this, the metal is more homogeneous than what you get with normal, atmospheric casting, from the top down. It's a huge increase in quality.

– What do we have here?

Vyacheslav Dovbysh: It's the housing of the electric motor. At certain moments, the electric motor helps the engine to accelerate faster. It also serves as a generator for the abundant electronics on board. So in our project, we use a hybrid system.

After this, the metal will be several times scanned, checked for physicomechanical properties, such as hardness, and then go to further processing. Next follows the most precise check on the micron scale. Some details will be checked again and again, even with the MRI. Everything in engines has to be flawless.

Up until recently, the only gasoline engines developed in our country by domestic experts date back to the 80's. Everything after that was only improvements. So was there a point in trying to get by without international best practices? Not really. But this time the goal was to master the technologies, rather than copy them.

Aleksey Terenchenko, Director of Power Systems Center at NAMI: Of course, it's easy to build an engine from components manufactured in Germany, in Europe. They have everything ready. We know that. It's an easy way that was sadly chosen by many of our engine manufacturers.

– And then they complain that we have the parts, but not the technologies.

– Here we had a different goal. To invest as much as possible in the local manufacturers, to help them with technologies, to help them with construction, to help them with engineers, to develop their competencies, okay? Not just to give them something and make them build it, but to allow them to adjust it to the technologies they have while closing the gap in the quality level required for top engines, top cars. That's the goal we set for ourselves, and I believe we're achieving it.

– You set this goal for the country's economy, too, right?

This healthy and productive request, "Give us a unique Russian product" was directed not only at engine manufacturers. And many received such a request for the first time in 30 years— not just put the brand "Made in Russia" on the international level, but make it even better and more reliable.

Folk wisdom, "Don't judge others by how they look" is not exclusively Russian. The same rule is followed by fashion trendsetters, the Italians and French, not to mention the extremely practical Germans who make a small but very important caveat. They say, it's not the person's clothes that matters, it's his shoes. This western piece of wisdom just wasn't working for Russian automotive industry. You'd ask, how come? In the Soviet times, we produced our own good tires. Take, for example, Kama. This tire-producing factory has been operating since 1973. It was the biggest one in the USSR, with 12 billion tires produced annually. VAZ, KAMAZ—almost everyone was getting their tires here.

Aleksander Makhotin, CEO of KAMA Center of R&D: "Then came 1991-92. World brands, such as Michelin, Continental, Pirelli have entered our market. Russia saw an influx of cars that weren't present in the Soviet Union. We weren't producing that kind of tires".

Back then, the industry was expected to die. "It's not competitive. You will never catch up with international brands. Don't even try." At the end of the 90's, it sounded like a verdict. The year 2018, the same factory.

Aleksander Makhotin: Here's a tire that no one else in the world can produce.

– No one? Only you?

– No one. Only us.

This is one of those tires that carry the 7-ton presidential limo. It's the reason why we came to Tatarstan, to the Nizhnekamsk Tire Factory, with a simple question.

– There are dozens of worldwide known brands that produce tires. Why you?

Aleksander Makhotin: First of all, it's a unique car. The tire requirements are also unique. When we were agreeing to this, we knew that there were no comparable tires. So we had to do everything ourselves.

What are these requirements that no other tire in the world can satisfy? Let's have a look. Every tire has a very important characteristic, the load index. For light vehicles, it ranges from 60 to 125. That's from 250 to 1,650 kilograms. So the maximum load that can be carried by 4 strongest tires is 6.5 tons. Anything more than that requires truck tires. But while having a big load index, they also have a low speed rating. As a result, the tires are either strong or fast. Were there no attempts to make something in between? There were. But they failed. Until Russian professionals got down to work. Apparently, there wasn't anything even similar. They had to invent and build everything themselves.

– What we achieved is a symbiosis. On one hand, it's a passenger-car tire, on the other hand, it's a truck tire.

Valeriy Kudryavtsev, Chief Designer at KAMA Center of R&D: "For certification, we nominated it as a C3 tire, a truck tire meant for trucks and buses. That's on one hand. On the other hand, it has all the properties of a passenger-car tire, like high maximum speed, high responsiveness which means a quick response to steering, as well as high stability on the straights and during corners".

The key secret to its durability is not easy to see. It's hidden inside the complex multi-layer structure of the tire. This is not a weaving mill as you might have thought. Instead of yarn, these spools carry this metal cord. A wire basically. The answer to the main question, "Why Russian-made tires?" Any other tire, without such an intricate weave, would just blow out. The tests have shown it many times. Here, tires are subjected to extreme testing. They get loaded, accelerated, heated and worn without mercy, much harder than it happens on the road.

Maria Ivanikhina, Head of Testing Laboratory: In a chosen mode, we imitate the behavior of the tire on the road, checking its performance.

– Like the way it turns?

– Exactly.

– Or how it responds to braking?

– We can check everything, yes. The main goal is to understand its limits.

– To blow it up?

– To destroy.

Destroying the tire reinforced with a metal cord is not easy. The final parameters go like this. Maximum tire load is 1900 kg, maximum speed is 190 km/h which can be pushed up to 210, as proven by tests.

Aleksander Makhotin: "I believe this tire will give us a push forward. It won't just end here, it won't be a tire just for this car. It will probably give Russia a new impetus. We can offer absolutely unique properties. I can say that right now this tire allows to save around 15% of fuel".

Still, for a typical owner of such a car, saving fuel is not the most important factor. Much closer attention will be paid to other things, like the quality of the interior materials, and the judgment will be even more harsh than that of the Minister of Industry and Trade.

Denis Manturov: "I can tell you this. While working on the interior elements, we were building on the feedback provided to us by potential clients. We conducted customer research, and not just one, but three times, at different stages. It went something like this. We invited owners of expensive high-end cars, such as Mercedes, Maybach, Bentley, Rolls-Royce. We equipped a special place and asked the respondents to look at the cars they already know and compare them to our car".

What elements inside create the feeling of an exclusive product? It's leather and plastic. Feels nice. NAMI is developing its own original plastic which is then vigorously tested. Together with the chassis, it's exposed to more than a hundred thousand kilometers of driving in a test car. In a premium car, there's no place for squeaking, rattling and other unwanted noises.

Vyacheslav Dovbysh: "Our project, among other things, means designing an exclusive car, and of course, an exclusive car has to be built from exclusive materials".

The materials that have been developed, manufactured and tested here will later go into mass production, and not only for this car. So we are also improving the quality of plastic in the domestic car industry? Cool.

Still, it's not the plastic that makes a car executive. It's leather. Or rather the way it's prepared. You can recognize good leather with your hands. What's interesting is that up until recently, for automotive and aviation industry this material was manufactured anywhere but in Russia, even though we've long had enterprises that manufacture absolutely top-notch products.

This factory near Ryazan has marked its 100th birthday in 2016, but its history began even earlier. Before 1916, it was located in Riga. It was evacuated here during the First World War. At the end of the 20th century, it almost collapsed, just like the Nizhnekamsk Tire Factory. But now it's the biggest in Russia and one of the biggest in the world productions of high-quality leather.

Andrey Nizov, CEO of Russian Leather: This is our own patented leather, that cannot be found anywhere else in the world.

– That's really great.

Yet up until recently this place wasn't producing automotive leather. Apparently, there was a lot of resistance to them entering this market. Project Aurus gave a jumpstart to the production of both automotive and aviation leather here.

Andrey Nizov: This is where the elements are being cut out. As you see, the computer software allows to position the pieces in such a way that we reduce the waste of this expensive material.

– These are the patterns?

– Yes. They are aligned with the piece of leather, and then the machine cuts them to make the elements needed to sew the end product.

The creation of such high-quality material takes up to 4 weeks. First, those hides are carefully selected that have a large surface and no defects. Then follows a long stage of processing. Before ending up on the cutting table, the raw material will go through several stages of soaking, liming, fleshing, tanning, dyeing, stuffing, drying and finishing. After all that, a lot of effort will be put into trying to ruin the final samples. The automotive leather has to be more than just soft and nice to touch.

Aleksander Kondrashov, Technologist: "The car can be used in very low temperatures. It's used even it's-30°C outside. So the car is parked outside, and when you get in and on the seat, the leather shouldn't crack. Same in summer. A car parked in the sun easily gets as hot as 60-80°C. But the leather shouldn't change either its color or its shape".

In this lab, the leather gets heated even to bigger temperatures. You probably know how to tell good leather from not so good. You might have even tried this test in a clothes store. A match or a lighter. Move it around a bit. A small trial by fire. But in this lab, the fire test is much harsher. Let's time it. 15 seconds. The leather can burn but only to a certain point, not more than 2 cm.

– Elena, what's your opinion?

Elena Ruzaykina, Head of Laboratory: This sample shows a very good result. In this case, both the burning time and speed are 0, because we start counting the burning speed after the fire has reached the first mark.

– So if in 15 seconds, it has burnt up to here, it's within the normal range?

– And it burnt around 20%. -Yes, exactly.

– So it passed the test?

– Yes, absolutely.

– Good leather.

In other areas of the lab, leather is not treated any better. It's getting rubbed, rumpled, bent, stretched, soaked in water, acid and brines, and then stretched again until it…

– Okay, so how strong it's supposed to be?

Vyacheslav Koval, Head of Automotive and Aviation Leather Division: There are certain durability requirements for automotive leather. It has to be quite strong, yet soft to make the passenger comfortable.

– Why weren't you making it before?

– We had to get some experience first. Automotive and aviation leather is the top level of leather craft.

Well, beauty is one thing, but what about crash tests? How is it with the active and passive driving safety systems?

– Do you know of any other car, the development of which was done -in close collaboration with the Protective Service?

– No.

That was one of the top officials of the Federal Protective Service. We could just finish here. But actually, our conversation was long and interesting. Too much to fit all of it here.

Vladimir Makarov, Department Head at FSO: All the safety and comfort features that we wanted to see in this car, were implemented in this car.

– Can you say that it's the safest car currently available?

– I think so. Whether it's passive or active driving safety, special safety or information safety, I believe it's the top car.

Still, we decided to check some of the safety features for ourselves. When a 2.5 kg metal ball falls down on the windshield from a height of 4 meters, naturally, there are consequences.

– The glass has to be replaced, right?

Andrey Nikolaev, Quality Inspector: It has to be replaced, yes.

– But it didn't go through.

– It didn't. It passed the test.

– So it's okay?

– It's a safe glass.

This is only one of the many tests that are used to test every shipment of car glass that rolls off the production line of this factory in Bor, Nizhny Novgorod Region. That includes the glass for Aurus cars. But how is it different?

Dmitry Anokhin, AGC Bor Glassworks: First of all, it's additional comfort and safety.

– How is that achieved?

– The windshield has a heating system, to quickly defrost the glass and start the car.

– The same as in production cars.

– There's also a head-up display. The head-up display allows us to avoid distractions while driving.

– Like this image that is projected here? Ah, this way you don't have to look down.

– Those are the main features. The glass on the sides and in the rear is made with the windshield technology. It's a three-layered, triplex glass. It reduces the noise inside the car and improves its safety.

Do the windows have a heating system? What leather is used for upholstery? What engine is under the hood? All these questions are, of course, very important. But what makes up the face of the modern car is in big part its electronic features and other hi-tech gizmos. So what do we have here? This is what's called an agile user interface. It was developed from scratch by NAMI experts, same as the intelligent safety system.

– What's the coolest feature of the car?

Denis Endachev, Director of IT Center at NAMI:

– If we're talking about the limo, it has the expanded view feature which allows to see what's going on around the car. There are extra displays and cameras installed in it. It's a feature that enhances the driving experience, as we can see from the tests.

– So what is the overview?

– 360°. You can see everything around the car. This car also has adaptive cruise control and a lane keeping system. If you turn on both systems at the same time the car can drive along the lane automatically.

– Does it recognize traffic signs?

– It does.

– Does it see pedestrians?

– It does.

Obviously, there was no way around using international components, especially in electronics, but even here, insists Denis, they've achieved 90% localization — made in Russia.

The biggest question is, what's the future of this car? I was preparing to ask this question in German but I didn't have to. Please, meet Gerhard Hilgert, a famous figure in German automotive industry, currently the managing director at Aurus.

Gerhard Hilgert: "The Aurus brand is a luxury brand. So we are planning to target this brand at high-class customers. Our competitors will definitely be such cars as Bentley, Rolls-Royce and Mercedes. There are no Russian-made luxury cars currently on the market. I believe it's something many people are interested in because Russian style is distinct. We have a good opportunity, a good chance to win several percent share of the market".

In any case, Project Aurus is already looking to go beyond the market of luxury cars. Here's the new upcoming premiere, an SUV with the formidable name Komendant. The ceremonial unveiling of this car is expected by the end of the year, but it's clearly going to be in the same style as other Aurus models. Also, installed under this hood is the same 600 hp hybrid gasoline engine. The only thing left is to test its performance. After all, it's an SUV. Well, we'll try to get ourselves a test drive.

But for now, let's go back to the test drive of the familiar black Aurus Senat, especially since it doesn't happen often that your driver is the Minister of Industry and Trade.

– How do you like your driving experience?

Denis Manturov: First, you shouldn't forget that it's a heavy, armored car. The light-weight, standard version of this car is very different in terms of the weight. But even the heavy, armored car is very easy to steer. It's responsive to acceleration and braking. You could feel it yourself. There's no body roll. The car performs really well.

– I wasn't scared, thanks to you. Thank you so much!

– Thank you!

At the end of this film, we can safely say that it's just the beginning of the project with the golden name Aurus. There will be new models, new solutions for the design, power system, electronics, and price. The car industry doesn't stand still, and neither do the petrochemical, electronic or metallurgical industries.

The experts say, "Look at the car produced in the country, and you will understand the state of its economy".

Business

In 2017, the number of Russian nationals flying abroad grew by almost one-third, Deputy Head of the FSBs Border Service, Colonel General Igor Shmotkin told TASS on Monday.

The interview marked his departments 100th anniversary.

“Last year, the volume of passenger traffic at airport border checkpoints grew by almost 34 percent,” Shmotkin pointed out, adding that Russians are increasingly traveling to new destinations.

If border checkpoints for cars, trains and ships are counted, “the number of foreign trips by Russian nationals grew 14 percent last year,” he added.

Last year, the number of Russians crossing the border in or out of the country was almost 20 million more than that of foreign nationals making in-and outbound trips. They crossed the border 64.8 million times last year, while Russian nationals traveled in and around the country 84.3 million times.

Russia under President Putin has made enormous progress, says Nicolai N. Petro, Silvia-Chandley Professor in Peace Studies and Nonviolence at the University of Rhode Island, in the US.

“Pensions have risen tenfold since 2000 […] the average life expectancy has increased by more than six years to 72.6. […] the government plans to raise the minimum wage to the living wage,” Petro pointed out.

The number of persons incarcerated in Russia fell by almost forty percent since 2001, and the number of minors in prison has fallen from 19 000 to just 1 000, after Vladimir Putin introduced key elements of modern criminal justice to Russia.

These include habeas corpus, a juvenile justice system, trial by jury, bailiffs, and justices of the peace.

Courts have strengthened the rights of defendants to exculpatory evidence, provided clearer guidelines on secrecy and closed judicial proceedings and pretrial detention centers have been all but eliminated.

Since 2014, the number of suits brought on behalf of foreign companies has tripled, while judgments in their favor have risen from fifty-nine to eighty-three percent of the total.

Business

GETTY

SECOND BEST: Only Stella Artois sells more beer in Britain than Budweiser

Research shows that sales of the US brand – the official beer of the World Cup – are soaring.

Trade analysts Nielsen say supermarket sales of Bud have surged by £17.5million to £381.7m during the past year.

Spin-off brands Bud Light and alcoholfree Prohibition Brew have pulled in £30.5m extra, taking the total to £418.4m.

Owner AB InBev credits a large portion of Budweisers recent success to its focus on football and the lucrative World Cup sponsorship.

By contrast, sales of Aussie rival Fosters have plummeted 11% to £354.2m over the same period.

Fosters has lost £31.8m sales of its standard lager while its Gold variety has slumped by £11.4m.

Budweisers UK marketing manager Rowan Chidgey hailed the soaring sales as “phenomenal”, and continued:

“Its performance has been driven by its affiliation to key sporting events and cultural moments this year.

This switch means AB InBev now owns Britains two biggest beer brands.

Stella Artois remain on top with £523.9million in value sales.

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