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Russia: a brief market watch
RUSSIA ECONOMICS · In Brief · 23 Jun 2023

The CBR decided to keep the key rate unchanged (at 7.5%) earlier in Jun but sent a hawkish signal to the market. The latter lifted the OFZ yield curve higher. The 10-year papers are now traded above 11%. The last time this level was in the spring of 2022. Many investors see a threat of potential ...

Russian macro: The economy gradually adjusts to geopolitical changes
RUSSIA ECONOMICS · Report · 21 Jun 2023

Rosstat published 1Q23 GDP statistics (on the production side, so far), and it appears that the y-o-y economic contraction was not as deep as the previous flash estimate suggested. GDP fell by 1.8% y-o-y (instead of the 1.9% reported previously), which is not much compared with the -4.5%, -3.5%, ...

The current account surplus appears narrower than reported previously
RUSSIA ECONOMICS · In Brief · 09 Jun 2023

The CBR published its updated estimates of selected items of the current account for 4M23 and the 5M23 data. It appears that reality now looks somewhat different relative to the previous perception. According to the CBR’s release a month ago, the current account surplus in April and 4M23 was $5.2...

Russia: a brief market watch
RUSSIA ECONOMICS · In Brief · 09 Jun 2023

Some acceleration of inflation during the last week to 0.21% w-o-w caused some nervousness among investors. Given the previous moderately hawkish rhetoric of the CBR, many didn’t rule out that the regulator could have raised the key rate today. We didn’t see the necessity to do that, as overall C...

Russian political/pandemic update: crises as usual
RUSSIA ECONOMICS · Report · 07 Jun 2023

It looks as though the mood of the Russian society was probably somehow shaken by drone attacks that occurred in several cities, including Moscow. Apart from that, May was a relatively quiet month for the majority of Russians (except for those living in the regions close to the Ukrainian borders)...

The Federal budget in balance in April as spending moderated
RUSSIA ECONOMICS · In Brief · 07 Jun 2023

The Ministry of Finance reported that in 5M23, the federal budget deficit was almost the same as in 4M23 (R3.4 trln), implying that in April, it was balanced (in fact, there was a tiny surplus). Spending moderated last month as the ministry spent slightly over R2.0 trln. Average monthly spending ...

The economy adapts to new arrangements and recovers gradually
RUSSIA ECONOMICS · In Brief · 31 May 2023

Rosstat released monthly economic statistics for April, which looks not too bad. Industrial output grew in April by 5.2% y-o-y, which brought the 4M23 growth to positive territory (0.4% y-o-y). In 1Q23, industrial output was down by 0.9% y-o-y. Seasonally adjusted m-o-m growth was up in April by ...

Russian macro: gradual de-Westernization is on the way
RUSSIA ECONOMICS · Report · 30 May 2023

As the Western countries decided to cut trade with Russia and oust it from the USD/EUR/GBP/JPY segment of the global financial system, Russian businesses shrugged their shoulders in bewilderment and gradually started looking for alternatives. Despite the various inconveniences caused by the fact ...

Russia: a brief market watch
RUSSIA ECONOMICS · In Brief · 25 May 2023

After some appreciation at the beginning of May, the ruble returned to the R/$80 area. The uncertainty remains high, and the recent package of sanctions confirmed that pressure on Russia will continue to increase. Many investors believe new restrictions on the financial sector and the “unfriendly...

Moderate y-o-y GDP contraction in 1Q23 prompts decent economic growth this year
RUSSIA ECONOMICS · In Brief · 18 May 2023

Rosstat reported that GDP was down by a mere 1.9% y-o-y in 1Q23 which is not bad a result following the 4.5%, 3.5%, 2.7% y-o-y contraction in 2Q22, 3Q22, and 4Q22 and the high base in 1Q22. So far, Rosstat didn’t provide any breakdown of the GDP – just this flash-estimate, which is the usual prac...

Russian macro: Russian economy set to rebound in 2Q23
RUSSIA ECONOMICS · Report · 16 May 2023

At the very end of April, we published a report on the trends in Russian industry (“Manufacturing to Gain Importance as a Driving Force”) and suggested that the country’s industrial sector would deliver quite strong growth in 2023 as a whole, especially in manufacturing. Looking at a broader rang...

Russia: a brief market watch
RUSSIA ECONOMICS · In Brief · 11 May 2023

A number of interesting events affected the FX market in recent weeks. Note that the ruble significantly weakened in April and moved from R/$77 to about R/$82, which was partially explained by increased federal budget expenditures. In April alone, they accounted for over R3.1 trln. In January, th...

Russia political, pandemic update: Fasten seatbelts securely…
RUSSIA ECONOMICS · Report · 03 May 2023

Public sentiment didn’t change much in April as the Russian authorities continued to enjoy strong popular support. Even though the economic statistics for April were not yet published as of these polls, it seems that the economy continued to adapt gradually to the new reality, and the majority of...

Russian macro: manufacturing to gain importance as a driving force
RUSSIA ECONOMICS · Report · 28 Apr 2023

Russian industrial output grew by 1.2% y-o-y in March and contracted by a mere 0.9% y-o-y in 1Q23 versus a 3.0% y-o-y contraction in 4Q22. Seasonally adjusted industrial output grew in March by 1.3% m-o-m. In the previous months, industrial growth remained negative due to the base effect caused b...

Russia: a brief market watch
RUSSIA ECONOMICS · In Brief · 27 Apr 2023 · 1 response

After the rapid depreciation at the beginning of April, the ruble stabilized in the R/$81 to R/$82 range. As some correction of oil prices occurred, we don’t think there are many reasons to expect the ruble to strengthen significantly soon. In addition, in May, Minfin may start purchasing FX on t...