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MinEconomy says GDP continued to slide and printed 1.9 %

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

GDP, Russia, CBR

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