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Macro week ahead – IP and main data package for August in Russia to illustrate immediate effects of RUB weakness on the economy


The most important statistical release this week is on Thursday, when Rosstat publishes its main data package for August, detailing retail sales, unemployment, real wages and other key data. However, before then we also have the industrial production report on Tuesday.

The political agenda for the current week is rather tight, with President Vladimir Putin scheduled to meet with the presidents of Tajikistan (14-15 September), Kazakhstan (16 September) and Belarus (18 September). The opening of the 70th Session of the UN General Assembly on 15 September might also generate some headlines.

While the continuing debate over the budget adds uncertainty to the economic outlook, we expect the forthcoming report to provide clues as to the effects a weaker RUB had on demand and supply in August.

We think FX volatility continued to support non-food retail turnover in August, as inflation expectations probably followed depreciation closely and consumers once again partly front loaded consumption of FX sensitive non-food items. As a result, retail turnover has likely recovered to above the -9.0% YoY level.

On the supply side, investment activity has likely slid further, to minus 9.5-9.0% YoY, on weaker construction as internal demand continues to be poor.

In the meantime, inflation has likely kept real wage growth under stress, while nominal wage growth stayed at historical lows, driving real growth closer to -9.5% YoY after -9.2% YoY in July.

Petr Grishin, Alexander Isakov
VTB Capital analysts

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