Russia's Economy: still in landing mode
Economic growth in Russia is slowing, but it has not yet reached the bottom: after a 3.5% YoY growth rate this year, GDP will slow to 2.0% YoY in 2013, in our view. The upshot of this, however, will be disinflation next year that will allow the CBR to cut rates. Coupled with recent monetary policy tightening, we believe that this is likely to lend credibility to the regulator before the implementation of the new inflation targeting regime in 2015. Meanwhile, fiscal policy is becoming more sustainable in the longer term due to the adoption of the ‘fiscal rule’ and attempts to contain pension system-related budget transfers.
Maxim Oreshkin, Daria Isakova
VTB Capital analyst
Back to the list