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Macro week ahead – IP and full package for June


The week starts with Rosstat’s weekly CPI and IP reports on Wednesday. The main statistical package, including retail sales, real wages, FAI investment estimate and other key data on the state of the economy in June, is due on Friday. Elsewhere in CEMEEA, the inflation report for June is to be made available in Poland.

The usual weekly CPI report, which for the last couple of months has invariably indicated food disinflation, is set to answer a pressing question: to what extent has utilities indexation contributed to the headline figure? We estimated that the indexation which took place last week was responsible for 0.3-0.4pp of the 0.7% WoW price growth, leaving 0.3pp unexplained by items observed on the weekly basis. One of the hypotheses is that Rosstat front-loaded the effects of indexation and the sequential rate is due to return to the 0.0-0.1% WoW range in the subsequent weeks. So, the current week's data could well show whether the spike is due to dissipate in the coming weeks or whether the headline in July is going to stay at June's level.

Otherwise, we anticipate the decline in IP production decelerating, as the headline is likely to print a drop of 3.0-4.0% YoY, after the 5.5% YoY slide in May. Unemployment is set to see only a slight increase, to 5.7%. However, the key indicator of the labour market – real wages – is likely to worsen, printing a drop of 8.0% YoY after the 7.3% YoY in May. The correction in FAI is accelerating and we see it sliding further to -8.0% YoY.

Alexander Isakov, Petr Grishin
VTB Capital analysts

CPI, Russia

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