This week starts with the regular meeting of the CBR’s Board of Directors on monetary policy (2 April) and the final estimate of GDP growth in FY12 and 4Q12 (2–3 April). The CBR is due to publish its preliminary estimate of the BoP in 1Q13 (2–3 April). On Wednesday, the State Duma Committee on the Financial Markets is to debate Elvira Nabiullina’s nomination as the new head of the CBR. The Services PMI for March is also due to be released this week. On 4–5 April, Rosstat is set to release its monthly CPI report, after its regular weekly CPI report (due on 3 April).
This week is likely to be heavily populated with economic news, but the most anticipated event, in our view, is the CBR Board meeting. Economic growth almost stalled in February and that, coupled with the YoY deceleration in CPI growth in March, is likely to push the CBR to start the easing cycle, we believe. Furthermore, the CBR’s latest comments were more dovish and we would treat that as a bridge towards explicit measures to support growth. Our expectations are not in line with consensus, which expects a hold decision tomorrow and easing to start later in 2Q13. Also, the upcoming CBR meeting might be the last prior to Nabiullina taking charge of the regulator (once the profile committee completes all the necessary formalities on 3 April, the Duma is likely to approve her nomination in April), hence it might be the only chance for the current team to start the easing cycle before the new CBR Chairman takes charge.
CPI in March. The latest inflation data point was 0.35% MoM growth for 1–25 March. We expect consumer prices to increase 0.5% MoM and 7.1–7.2% YoY in March and so think that February’s reading marked the peak for 2013.
GDP in 4Q12. Given the FY12 and 9mo12 data, the 4Q12 reading might be in the range of 1.9–2.3% YoY. However, we anticipate a visible revision of the first estimates. Overall, we see the downwards trend remaining in place during 1Q13 and then rebounding.
Maxim Oreshkin, Daria Isakova
VTB Capital analyst
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