Yesterday, we published our regular Russia Early Indicators report, in which we summarised the results of the PMIs and the first statistics for the last spring month of 2014. We provide key extracts from the report below.
The economy is entering the summer in a hovering mood. It looks as though the impact from temporary manufacturing drivers (mainly oil refining and chemicals) started to dissipate in May and demand for construction-related goods deteriorated, while import substitution triggered by the weaker currency and trade restrictions is continuing, preventing IP from falling. Nevertheless, companies are gradually transferring the higher cost burden to final consumers, but as input prices have started to slow our disinflation forecast still seems relevant.
Daria Isakova, Vladimir Kolychev
VTB Capital analyst
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