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Macro week ahead – February data for Russia

In Russia this week, Rosstat is due to release its monthly package of economic statistics for February, starting with data on IP and then proceeding with statistics on internal demand and the labour market. On Wednesday, the regular weekly CPI numbers are due out. Otherwise, the CEEMEA focus will be on Turkey, where the CBRT is to meet tomorrow, as well as Poland, where we expect February IP data, and South Africa, which is due to release CPI numbers.

The Russian economy is still on course for stagnation, and while February seems to have brought a blip due to the Olympics and weather, we expect to see the economy resuming its slow down at a faster pace as early as in March, as the uncertainty shock hits business and consumer confidence (see our Russian Economy Monthly of 17 March). But as to what Rosstat is likely to publish this week on the production front, although mining and manufacturing seem to have remained near January levels, electricity output returned to the red on the back of colder weather (-2.6°C YoY), thus likely pushing IP growth back above the waterline. Consumer demand trends might have followed a downward path last month, given the deeper decline in non-CIS imports and continuous shrinkage of car sales. To add, a puzzling decline in the unemployment rate at the beginning of the year is likely to have been pared last month.

While Russia will likely be evenly populated with top-tier data, elsewhere in CEMEEA we shall be focusing mostly on Tuesday, when Turkey’s central bank is to decide on interest rates. We and the consensus expect an uneventful meeting with rates on hold. Any easing is unlikely due to overshooting inflation (which is on a persistent upward trend due to the weaker lira) coupled with an explicit signal voiced by the governor that policy would remain tight until the inflation outlook improves. Additional hikes are hard to implement prior to local elections in late March, the more so when an economic slowdown is taking hold.

Vladimir Kolychev, Daria Isakova
VTB Capital analyst

Rosstat, CPI

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