Without volatile import items (mainly aircraft), January’s drop in non-CIS imports growth would have been even slightly deeper at 1.6% YoY; however, this would have still represented saw-toothed behaviour around zero starting from April 2012. While imports of electrical machinery gathered pace at the start of this year with a pick-up of 19% YoY (vs. 4% annual increase in 2013), the drop in cars, mechanical equipment and chemicals imports offset this positive improvement.
It once again flags that local demand (both consumer and investment) remains stagnant and no growth momentum has been seen so far. Imports would be harmed further with the recent RUB sell-off as it gets more expensive (read as less competitive on markets where Russian producers do exist) and as FX pass-though would eat into consumers’ purchasing power as well.
We are therefore retaining our call that the rouble will gain against the dollar, normalising after the January sell-off, and finish this quarter near 33.50 (unless oil abruptly drops).