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COUNTRY INSIGHTS

Russia: a brief market watch
RUSSIA ECONOMICS · In Brief · 05 Jul 2024

The effects of sanctions against the Russian FX infrastructure are still visible. The ruble remains abnormally strong (currently, it trades around R/$87-88 on the OTC market vs about R/$90 before the announcement of restrictions). It looks abnormal as the bank’s net liquidity position with the CB...

Industry keeps growing steadily as domestic demand remains strong
RUSSIA ECONOMICS · In Brief · 27 Jun 2024

Rosstat reported that in 5M24, the industrial output grew by 5.2% y-o-y. In May, it grew by 5.3% y-o-y and 2.0% m-o-m in seasonally adjusted terms (therefore, offsetting a minor m-o-m seasonally adjusted contraction by 0.1% in April). The mining segment remains almost flat, having grown by a mere...

Russian macro: GDP—uneven performance by sector amid ongoing structural changes
RUSSIA ECONOMICS · Report · 20 Jun 2024

In the aftermath of Rosstat’s publication of regular economic statistics that looked decent in 1Q24 and 4M24, June appears to be a month with some negative surprises. Persistently high (and even accelerating) inflation is one of them. The statistical agency reported that the MTD inflation reached...

Russia: a brief market watch
RUSSIA ECONOMICS · In Brief · 20 Jun 2024

The recently announced package of sanctions against several companies (including the National Clearing Center), which provides infrastructure for FX trading at the Moscow Exchange (MOEX), was a negative surprise. Even though the market participants had been considering such a possibility since 20...

GDP grew by 5.4% y-o-y in 1Q24
RUSSIA ECONOMICS · In Brief · 14 Jun 2024

Rosstat reported that the Russian GDP grew by 5.4% y-o-y in 1Q24. The agency published just statistics on the production side. Statistics by end-use will appear later. The published figure appeared generally in line with our forecast as we expected GDP to expand by 4.0% (a bit faster looks also p...

Balance of payments looks stable
RUSSIA ECONOMICS · In Brief · 14 Jun 2024

The Russian Central Bank published its flash estimate of the 5M24 balance of payments, and it looks as though its trends remain sustainable. In 5M24, the current account surplus reached $38.1 bln. It accounted for $5.1 bln in May alone, i.e., slightly lower than in April ($7.1 bln). Exports in Ma...

The Russian budget remains in decent shape
RUSSIA ECONOMICS · In Brief · 11 Jun 2024

The Ministry of Finance reported that in 5M24, total revenues of the federal budget reached R14.3 trln, i.e., a 45.5% y-o-y increase. Oil and gas (O&G) revenues grew by 73.5%, while non-O&G revenues climbed by 34.1%. The former revenue constituency of the budget is quite volatile, and it will lik...

The economy keeps adjusting to new realities
RUSSIA ECONOMICS · In Brief · 06 Jun 2024

Rosstat reported that in 4M24, the combined output of the five basic sectors (a monthly proxy for overall economic activity) grew by 6.3% y-o-y. In April alone it was up by 5.5% y-o-y. Despite some deceleration the overall figure looks decent. Economic growth is largely driven by expanding domest...

Russia: a brief market watch
RUSSIA ECONOMICS · In Brief · 06 Jun 2024

The Russian securities market appeared under pressure in recent weeks. Tighter rhetoric by CBR officials convinced investors that the key rate may be raised as soon as in June. Market started to price in this scenario, which sent the yield for 10-year OFZ above 15%, while the equity market index ...

Industry continues to expand in 4M24
RUSSIA ECONOMICS · In Brief · 30 May 2024

Rosstat reported that in 4M24 and April alone, industrial output grew y-o-y by 5.2% and 3.9%. Some y-o-y deceleration in April was, to some extent, an effect of an additional calendar day in February (leap-year effect). Going forward the magnitude of this effect will ease, and it looks as though ...

Russia: a brief market watch
RUSSIA ECONOMICS · In Brief · 23 May 2024 · 1 response

The situation in the FX market remained relatively stable. A steady inflow of FX earnings contributed to the ruble strengthening (close to R/$90) amid moderate trading activity. Most likely, in the near future, the ruble will fluctuate in a narrow range of R/$90-92. Its potential for appreciation...

Balance of payments remained stable in 4M24
RUSSIA ECONOMICS · In Brief · 17 May 2024

The CBR reported that the 4M24 current account surplus climbed to $31.7 bln after it reached $6.6 bln in April alone. As the statistical data for the previous month, published earlier, were revised upward, the surplus appeared a bit wider than expected. Overall, the 4M24 current account surplus e...

Russian macro: GDP can grow above 4% in 2024 if PM’s 1Q24 number is correct
RUSSIA ECONOMICS · Forecast · 13 May 2024

On May 12, the recently re-appointed PM Mr. Mishustin, while speaking in the Duma, announced that in 1Q24, the country’s GDP grew by 5.4% y-o-y. The number came from the latest Economics Ministry publication. Interestingly, the Ministry upgraded its 2024 growth forecast at the end of April to 2.8...

Russia: a brief market watch
RUSSIA ECONOMICS · In Brief · 09 May 2024

The ruble appreciated in the past two weeks from USD/RUB 94 to almost USD/RUB 91. We suppose that there were two main reasons for such dynamics. Firstly, efforts of the Russian exporters to repatriate export earnings to Russia appeared relatively successful. The settlement between the Russian com...

OFZ: Russian debt puzzle still not assembled
RUSSIA ECONOMICS · Report · 29 Apr 2024

The yields in the Russian debt market continue to grow. Last week’s tightening of the CBR's signalling regarding the further trajectory of the key rate may even stimulate this trend. On one hand, even the existing yields look very attractive to long-term institutional investors. On the other hand...

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