The Russian Federal Customs reported that growth in
The recent reading implies only a benign upturn in import growth at the beginning of this year, as the strong total YoY number hides an exceptional surge in the volatile components (especially in imports of railroad engines and pharmaceuticals) and trend growth (MoM SA 3mMA annualised) in imports of nonvolatile items improved only modestly last month from almost 8% to 10.8%. Among the key growth drivers were investment goods (mainly machinery and electrical facilities as well as rubber), shoes and clothes. Hence, we might see a rebound in fixed capital investment data in January after a decline of 0.7% YoY in December. At the same time, the drop in the import of cars is worrying, and might imply that weakening activity in the Russian car sector is continuing.
However, while January’s report might be treated as positive, we do not see much support for imports in the near term (on the back of anticipated poor expansion of internal demand amid fiscal and lending constraints). Also, do not forget that stronger EURUSD is a factor supporting the