Russia Output & Demand - November
November data from Rosstat confirms weak growth remained in place: retail sales picked up slightly, while investment growth decelerated. The former was likely supported by the still tight labour market and still strong retail lending activity. Investment decelerated after a one-off spike in October and did not come as a surprise due to the unfavourable base effect and cooling corporate lending. We reiterate our forecast of real GDP growth at 3.5% YoY this year, and suggest that growth will remain slow early next year on the negative impact from fiscal policy and slow down in lending. Policymakers are likely to be tempted to react to the latest figures by maintaining their ‘wait-and-see’ stance for the moment and are unlikely to be in any hurry to help economic growth. Therefore, we are reiterating our view that policymakers will start the easing cycle in late-1Q13/early-2Q13.
Maxim Oreshkin, Daria Isakova
VTB Capital analyst
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