Today, we published Russia Early Indicators: January; growth still weak. A summary of the report is presented below.
Early January indicators, PMIs and hard data taken together, result in a mixed economic picture for the beginning of the year. On the production side, we shall be looking for almost unchanged IP YoY growth for January, as numerous opposing factors are set to balance each other out (beneficial calendar factor and improved gas output vs. a drop in the YoY growth of rail cargo volumes as well as weaker coal and electricity indicators). Meanwhile, positive customs data for non-CIS imports is supportive for consumption growth, especially given the increase in imports of investment goods. However, a slowdown in Services PMI (particularly in its business expectation sub-index) ate into this upbeat sentiment, flagging softer consumption. Overall, we expect to see the economy remain weak, with GDP growth at 2.0-2.5% YoY over the next couple of quarters under our Brent price scenario of USD 110/bbl.
Maxim Oreshkin, Daria Isakova
VTB Capital analyst
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