Russia: Witnessing improvement in output and demand – Danske Bank

By FXStreet FXStreet (Delhi) – Vladimir Miklashevsky, Economist at Danske Bank, notes that Russia’s October output and demand data show some relief in output indicators and signal that deepening economic contraction has been left behind.

Key Quotes

“The fall in fixed investments and industrial production continued to shrink (-5.2% y/y and -3.6% y/y, respectively) as we had expected while the demand side continues to disappoint on account of the purchase power crash. As inflation remained high, real wages growth (-10.9% y/y) shrank the most in 16 years, pushing retail sales to their lowest level since 1998 (-11.7% y/y). We expect the bottom on the demand side to be reached in Q4 15 at the earliest as the private consumption data face an extremely high base effect in December 2015.”

“On the output side good news continues to flow from the agricultural sector which rocketed 7.7% y/y in October expanding 3% y/y in 10M as Russia’s counter measures over food imports boosted local supply. While manufacturing fell 5.9% y/y, it saw a 2.8% m/m expansion although affected by seasonality.”

“Russian consumers continue to suffer the most during the current recession. Purchase power fell to its weakest in years as 2015 average inflation is at 15.6% y/y, …read more

Source:: FX Street