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9JUL12
Ruble REER continued to weaken in June, declining 4.3% MoM
The ruble real effective exchange rate weakened 4.3% MoM in June, intensifying from a drop of 1.7% MoM (CBR upgraded May data from -2.0% MoM), bringing the YTD change to a negative value of -0.4% (from +4.0% in January-May). The ruble fell against the dollar...
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20MAY13
Federal budget returned to the red in April
In April, the monthly federal budget printed a deficit of 0.3% of GDP (RUB 13bn), returning again to the red after one month of surplus, according to the Ministry of Finance. Revenues and expenditures were at RUB 1.12tn (+2.3% YoY) and RUB 1.13tn (+5.4% YoY), respectively. Non oil and gas revenues decreased 10.6% MoM and were up a mere 0.3% YoY in March to RUB 534bn, while oil and gas revenues jumped 10.8% MoM and 4.3% YoY to RUB 584bn. MinFin’s outstanding deposits in the banking system added RUB...
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14MAY13
May: struggling for growth
FY13 2.4% GDP annual growth now looks upbeat. We see downside risks to our base case forecast on the back of the weak economic performance in 1Q13 and delays in developing infrastructure projects under the ‘infrastructure bonds’ framework. Further downside risks to growth could arise if monetary stimuli are delayed and the oil price remains under pressure. April pick-up in CPI on veg. prices short-lived. This year, vegetable prices started rising earlier than the previous year, adding upward pressure...
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14MAY13
Non-CIS imports jumped 8% YoY in April
The Russian Federal Customs Service has reported that the growth in non-CIS imports accelerated to 8.1% YoY in April, from 0.5% YoY in March, bringing absolute volumes to USD 23.1bn. Non-volatile components improved to 5.3% YoY, from almost zero in the previous month, while the growth in the import of food products advanced visibly to 9.2% YoY (from -2.2 YoY in March). The import of investment goods kept picking up in April: they increased 6.8% YoY (vs. 3.2% YoY in March). Importantly, the decline...
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13MAY13
Rouble REER weakened 1.5% MoM in April
The rouble real effective exchange rate depreciated 1.5% MoM in April, softening significantly from the 0.1% monthly decrease in March. In real terms, RUB weakened 1.5% MoM against USD (vs. -2.0% YoY in a month ago) and 2.1% MoM against EUR (+0.8% YoY in March). The greater RUB REER appreciation in April (vs. that seen in March) was partly a result of the average nominal rouble weakening against EUR (RUB was down 2.0% MoM against EUR, according to official average rates), despite the CPI spiking...
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8MAY13
April's increase will likely be short-lived
According to Rosstat, CPI was reported at 0.5% MoM and 7.2% YoY in April (from 0.3% MoM and 7.0% YoY in March), in line with our and market expectations. The key growth drivers were food prices accelerating to 8.8% YoY (from 8.3% YoY in March) and services tariffs to 8.1% YoY (from 7.9%YoY). Meanwhile, non-food prices slowed to 5.1% YoY (from 5.2%). Rosstat’s core inflation edged up a mere 0.1pp to 5.7% YoY in April. The pick-up in headline CPI in April was mainly driven by the acceleration in...
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29APR13
MinFin prepares amendments to 2013 federal budget
On Friday, Minister of Finance Anton Siluanov announced amendments to the 2013 federal budget in light of the Ministry for the Economy’s revised macro forecasts, lower non oil & gas revenues and other changes. The key budget indicators (volumes of revenues and expenditures) are to be kept unchanged. RUB 166bn (RUB 42bn from the unfrozen antirecessionary standby stockpile and RUB 124bn from spare resources within the budget (rest of the money on the State Pension Fund balance; lower debt services...
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12APR13
Federal budget returned to the black in March
In March, the monthly federal budget printed a surplus of 0.5% of GDP (RUB 141bn), following three consecutive months of deficits, according to the Ministry of Finance. Revenues and expenditures were at RUB 1.12tn (+2.0% YoY) and RUB 1.09tn (+6.8% YoY), respectively. February’s deficit was revised to 3.1% of GDP (from 4.9% of GDP previously). Non oil and gas revenues increased by more than a half MoM, recovering (as usual) from the seasonally lower level in February to RUB 593bn (and up 4.2% YoY)...
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9APR13
Ministry of Finance to consider an increase in motor fuel excises
According to Vedomosti, regional road funds are facing a deficit of some RUB 108.7bn because oil companies have shifted to Euro4-5 motor fuels and, correspondingly, there is a decline in excises paid. The Ministry of Finance has proposed increasing the excise on Euro4-5 motor fuel, but this would be not enough according to the paper. In order to offset the deficit, the ministry is also proposing to increase the export duties on oil products, from 66% at present to 72% in 2014, and the mineral extraction...
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8APR13
Key events are non-CIS imports and car sales for March
This week includes the March statistics on non-CIS imports (customs, likely at the beginning of this week), the sales of new passenger cars (AEB, 8–9 April) and the federal budget balance (from MinFin, 10–11 April). The CBR is due to publish the external trade balance for February (9–11 March), while Rosstat is to release its regular weekly report on the CPI on Wednesday and its consumer confidence index for 1Q13. March statistics on non-CIS imports. Following the customs statistics on Russia’s...
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4APR13
MinFin wants to start converting oil revenues in the open market
Yesterday, Anton Siluanov, the minister of finance, said that MinFin would start FX operations in the open market for accumulating/spending the Reserve Fund in 2H13. He added that MinFin would be offering hard currency at banks' deposit auctions. The change of timing comes as a surprise, since MinFin had previously planned to start operations in the FX market “before 2015” (i.e. when the CBR would be closer to a fully-fledged inflation targeting regime). We had therefore interpreted this as meaning...
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1APR13
Debates on social tax for self-employed
President Vladimir Putin has charged the government with examining the optimal level of social tax for people who are self-employed within the next two weeks. He also noted that since the end of November last year, 352,000 SME have closed, but only 27% of those reported to the tax service. Separately, Deputy Minister of Finance Tatiana Nesterenko objected to the proposal to reduce the social tax for self-employed entrepreneurs from double the Minimum Statutory Monthly Pay to just one MSMP, as it...
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22MAR13
MinEconomy says economy stalled in February
According to MinEconomy, real GDP growth in February decreased further to 0.1% YoY, from 1.6% YoY in January. In 2mo13, Russia’s economy added 0.9% YoY (vs. 3.4% YoY in 2012). Adjusting for seasonal and calendar factors, the MoM change in GDP remained negative, but improved to -0.1%, from -0.3% in January. The key factors behind the drag were the YoY decline in exports and the slowdown in retail sales growth. The latter can be explained by the shift in households’ spending mode towards longer investments...
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22MAR13
Government discusses Strategy for Developing the Russian Far East and Baikal region
Yesterday, the government held its regular weekly meeting. This time, the key topic was the Strategy for Developing the Russian Far East and Baikal region by 2018. Prime Minister Dmitry Medvedev commented that the planned financing (from the private sector, federal government and regional governments) of RUB 10tn (vs. Russia’s GDP of RUB 62tn in 2012), was «without precedent». In order to attract private investment, the government has suggested special tax reliefs, to be applied at the regional level...
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19MAR13
Government considering graduated property tax
According to Vedomosti, MinEconomy and MinFin have agreed on a graduated property tax based on the cadastral valuation, which is expected to be implemented in 2014 (but no later than 2018). It assumes only one type of tax relief: a unified withholding for 20sqm for every property unit. The maximum standard tax rate for residential property is planned to be set at 0.1%, which will likely imply a doubled tax burden for regular Russian flats (around RUB 1,466, according to the Federal Tax Service)....
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15MAR13
Federal budget prints 4.9% of GDP deficit in February
The monthly federal budget deficit reached RUB 244bn, or 4.9% of GDP, in February 2013, according to the Ministry of Finance. Revenues and expenditures were at RUB 0.9tn (+10.0% YoY) and RUB 1.1tn (+9.4% YoY), respectively. January’s deficit was revised to 0.3% of GDP (from 1.8% of GDP previously). Non oil and gas revenues decreased 40% from January to RUB 376bn (but were up 17% YoY), while oil and gas revenues picked up 9.7% MoM to RUB 511bn (+5.2% YoY). MinFin’s outstanding deposits in the banking...
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14MAR13
No rate change likely despite a slightly less dovish last statement
Despite a slightly less dovish statement in February, we expect to see more focus on economic risks this time. We would treat such a change as a bridge towards a first cut in April. The chances of a cut in April are growing, as headline CPI has likely turned the corner, while economic growth has dropped to well below potential on the back of a slowdown in bank lending and fiscal policy tightness. Shifts in commentary would also likely hint at the direction of monetary policy under the current nominee...
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14MAR13
Trade surplus in January expanded further to USD 17.7bn
According to the CBR, the trade surplus in January edged up QoQ to USD 17.7bn (from USD 17.1bn in December), although it was 13% lower than a year ago. Exports continued to decline, contracting 1.7% YoY to USD 39.0bn, although in MoM SA terms growth rebounded slightly to 1.0%, from 0.7%. Imports gained a significant 10.1% YoY (after the 2.4% YoY growth in December), but ticked down to 2.7% MoM SA (from 3.0% MoM SA a month ago) to USD 21.3bn. In January, the external trade balance was almost unchanged...
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7MAR13
Rouble REER gained 0.8% MoM in February
The rouble real effective exchange rate appreciated 0.8% MoM in February, softening more than a half from the 1.9% monthly increase in January. In real terms, RUB strengthened 0.6% MoM against USD (vs. +2.3% YoY in January) and 0.5% MoM against EUR (+1.3% YoY in December 2012). The milder RUB REER appreciation in February (vs. that seen in January) was partly a result of the average nominal rouble weakening against EUR and less strengthening against USD (RUB was up 0.3% MoM against USD and down...
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4MAR13
Russian Manufacturing PMI stayed at 52.0
The Russian Manufacturing PMI for February came in at 52.0, the same reading as in January. The new orders sub-index moved down a bit to 55.1 (from the 23-month high of 56.7) and export orders returned to below the 50 mark, printing 49.8 after a significant jump to 50.2 a month ago. Reflecting the lower new order receipts, both output and stocks of finished goods decreased in February (to 52.9 from 53.2 and to 45.7 from 45.8, respectively). Inflationary pressure indicators continued to decline...
