According to MinEconomy, real GDP growth in November decreased further to 1.9% YoY from 2.3% YoY in October and 2.7% YoY in September. In 11mo12, Russia’s economy added 3.5% YoY (vs. 3.7% YoY in 10mo12). Adjusting for seasonal and calendar factors, the MoM increase in GDP remained at 0.1%, similar to October (vs. on average 0.3% in 1H12 and 0.5% in 3Q12).
Weakening GDP growth in November can be explained by slowing growth in fixed capital investments, in our view (to recap, investments added a mere 1.2% YoY vs. 7.3% YoY in 3Q12). The recent reading indicates that the overall economic picture remains weak and is even worsening; this thereby bodes well for our full-year forecast of 3.5% YoY and 2.4% YoY in 4Q12. Furthermore, we still expect that the CBR will start easing as early as March-April next year to support economic growth, which is to be dragged down by cooling lending growth and tighter fiscal policy.
Maxim Oreshkin, Daria Isakova
VTB Capital analyst
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