Russia’s economic data for June is likely to show some rebound from May’s weak levels (on the extended holidays). As for production, we could well see a sligth recovery in YoY IP growth to 0.5%, from -1.4% in May (according to CDU TEK, gas output growth in June returned to the red, while the increase in oil output ticked up; growth in electricity output stayed only slightly above zero, despite the hot weather; rail cargo volume dynamics improved a bit). As for local demand, the persistent double-digit decline in car sales (in June) and rebounding (but still low) growth of non-CIS investment imports last month imply that the consumer and investment data improved in June, but only marginally, despite the less negative calendar factor. On the labour market, which started cooling in April, we expect a further increase in the SA unemployment rate and forecast NSA unemployment stable at 5.2%.
The weekly CPI will likely bring further evidence of headline disinflation due to the favourable base effect in food prices. Full-July headline CPI is to slide closer to the upper bound of the CBR’s target range (to 6.3-6.5% YoY).
In the rest of the CEEMEA universe, we expect Poland’s CPI data to confirm subdued inflation pressures in the economy, with the headline remaining close to 0.5% and core sliding below the 1.0% mark. The weak inflation environment (we expect core inflation to remain low in the next several quarters) will determine dovish stance of NBP, which could continue the easing cycle this autumn.