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Macro week ahead – August data for Russia


In Russia, the week starts with the monthly raft of economic statistics for August, which includes data on internal demand, the labour market and IP. There is also the latest monthly CPI report for August in our CEEMEA universe, with the estimate from South Africa.

Tomorrow we have the monetary policy decision from the Central Bank of Turkey, and on Thursday from South Africa. The regular release of the weekly CPI data in Russia and Poland’s IP report for last month is due on Wednesday.

The economic statistics for August are likely to provide more evidence of a pause in the Russian economy, suggesting that July's strength was short-lived after the sharp decline in May-June. On the production front, although railway cargo volumes firmed in August and oil and gas output continued to increase, electricity consumption softened, suggesting that the underlying momentum across power-intensive manufacturing industries remains subdued. All in all, we expect a slightly faster IP decline, partly on the negative calendar factor.

As for local demand, the persistent drop in car sales, despite the state backed cheaper credits for purchasing vehicles, and abating retail loans growth might imply that consumer demand stayed bleak. Meanwhile, July’s jump to this year’s high in investment YoY growth was mainly a correction after the deep drop in June, and in August it has likely returned to stagnation as no drastic support has so far arrived.

However, the key data point now remains the labour market. We expect the recent (since April) upward trend in SA unemployment to persist.

Daria Isakova
VTB Capital analyst


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