Country Insights

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The federal budget posts surplus despite several amendments of expenditures
RUSSIA ECONOMICS - In Brief 19 Jan 2022
According to Minfin’s preliminary budget execution statistics, the federal budget posted a surplus of around R0.5 trln, which should be slightly below 0.4% of GDP. The figure looks lower than we expected, but it only happened because expenditures were suddenly increased to R24.8 trln. A couple of...

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Strong 2021 current account amid growing non-energy exports, higher energy prices, and a not-too-negative services balance
RUSSIA ECONOMICS - In Brief 18 Jan 2022
The Central bank reported that the Russian current account surplus reached $120.3 bn in 2021, which was a bit less than expected as the investment income balance turned more negative ($41.6 bn in 2021 versus $34.1 bn in 2020). Russia’s trade surplus widened to $185.9 bn in 2021 as exports reached...

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Market volatility increases as geopolitical noise hit Russia
RUSSIA ECONOMICS - In Brief 14 Jan 2022
The Russian economy is waking up after a long New Year holiday break in a volatile environment caused by geopolitical noise. Compared to December 31, the Russian 10Y OFZ yields jumped by around 100 bps on January 14. The Russian ruble nearly attained almost the R/$ 77 benchmark on January 5, ahea...

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Russian macro: recent Rosstat revision promises stronger growth in 2021-2022
RUSSIA ECONOMICS - Report 07 Jan 2022
Rosstat announced at the very end of December 2021 that it had revised Russia’s annual GDP statistics for 2019-2020. The quarterly GDP numbers, however, have not been upgraded either for 9M21 or previous periods. Therefore, the revised annual numbers do not match the available quarterly statistic...

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Russia’s pandemic/political update: seeking points of no return
RUSSIA ECONOMICS - Report 03 Jan 2022
As the restrictions imposed by the Russian authorities in 2021 to counter the pandemic were moderate, selective, and short-lived, the country’s economic performance turned out to be better than expected. It now looks as though the 2021 GDP growth well exceeded 4.0%. Economic activity looked stron...

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Season’s greetings from Rosstat: as the revised numbers suggest 2020 GDP contraction was not as deep as reported earlier, the 2021 dynamics will look better as well
RUSSIA ECONOMICS - In Brief 30 Dec 2021
Rosstat just reported that the 2020 GDP was higher in nominal terms, and contraction in real terms was not as significant as reported earlier - the new figure is 2.7% instead of 3.0%. Rosstat also revised up Russia’s GDP 2019 growth to 2.2% (from 2.0% reported earlier). Even though making such re...

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Economic performance looks good in November, albeit high inflation in December disappoints
RUSSIA ECONOMICS - In Brief 29 Dec 2021
Rosstat reported that the output of the five basic sectors (industry, agriculture, trade, transport, construction) increased y-o-y in November and 11M21 by 7.1% and 6.4%. This y-o-y growth in November looked strong due to stronger than expected production growth in agriculture (due to late harves...

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Industrial output up by 5.2% y-o-y in 11M21
RUSSIA ECONOMICS - In Brief 22 Dec 2021
Rosstat reported that industrial output increased y-o-y by 5.3% and 5.2% in November and 11M21. As regularly happened in 2020 and 2021, statistics for the preceding month were revised up. This revision was quite significant as, for instance, previously reported y-o-y October growth in manufacturi...

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Consumer credit growth decelerated sharply amid a strong increase of household deposits in November – well before the recent key rate hike
RUSSIA ECONOMICS - In Brief 21 Dec 2021
Central Bank of Russia reported that the total credit to households grew by a mere 0.9% m-o-m in November, having decelerated sharply from 1.6% m-o-m in October and average monthly 2.0% seen in 2Q21 and 3Q21. At the same time, household deposits in November increased by 1.7% m-o-m, having fallen ...

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Russian Macro: The Central Bank Turning Increasingly Hawkish
RUSSIA ECONOMICS - Report 20 Dec 2021
On December 17, the Central Bank of Russia raised its key rate by 100 bps to 8.5% and mentioned that a further rate hike could be possible in mid-February if inflation expectations remain high and inflation itself stays elevated. The regulator one more time referred to its previous views suggesti...

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GDP up by 4.6% y-o-y in 9M21 pointing to a deceleration in 2022
RUSSIA ECONOMICS - In Brief 15 Dec 2021
Rosstat reported that Russia’s nominal GDP reached R33.9 trln in 3Q21. In 4Q21 the nominal figure will be even higher so that GDP in 2021 as a wh0le will exceed R128 trln, as was reported in our recent forecast. The 9M21 GDP was up by 4.6% y-o-y - having increased by 4.3% y-o-y in 3Q21 and by 7.4...

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Inflation w-o-w staying low for a second consecutive week in December
RUSSIA ECONOMICS - In Brief 15 Dec 2021
Rosstat reported that in seven days ending December 13, inflation w-o-w was again at 0.06%, i.e., the same as a week before. In two weeks of December inflation reached just 0.12%, which was in stark contrast to much higher inflation seen in October and November (inflation YTD reached 7.64% by mid...

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The Federal budget surplus exceeded R2.3 trln in 11M21
RUSSIA ECONOMICS - In Brief 13 Dec 2021
The Finance Ministry reported that the federal budget surplus exceeded R 2.3 trln amid strong revenue collection and rather moderate spending in November. In 11M total revenues exceeded the initial annual plan by 19.6% as oil-and-gas revenues exceeded the annual target by 36.6%. Non-oil-and-gas r...

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​OFZ: Russian institutional investors have reduced positions in 3Q21
RUSSIA ECONOMICS - In Brief 13 Dec 2021
CBR has published data on OFZ holdings by local institutional investors following as of end of 3Q21. For the first time in a year, they reduced positions in government bonds (-R51 bln in nominal terms in June-September). Pension funds have cut investments by R48 bln, and insurance companies --- b...

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Russian macro forecast: emphasis on inflation and rates as growth returned and “booster” sanctions offered
RUSSIA ECONOMICS - Forecast 09 Dec 2021
Rosstat reported that 2Q21 GDP was up by 4.3% y-o-y, implying that the economic growth could vary between 4.6% and 4.7% in 9М21, which is in line with our previous 2021 GDP growth forecast, which ranged from 4.2% to 4.3%. In 2022 GDP growth will naturally decelerate. What has changed signific...