Friday November 18 2016
Russia Jobless Rate Falls To 5.4% In October
Federal State Statistics Service | Yekaterina Guchshina | yekaterina@tradingeconomics.com

Russian unemployment rate decreased to 5.4 percent in October of 2016 compared to 5.5 percent a year ago and in line with market expectations. In the previous month, the jobless rate was recorded at 5.2 percent.

The number of unemployed people decreased by 152 thousand to 4.103 million in September of 2016. Meanwhile, the number of economically active decreased by 0.2 million to 76.6 million (52 percent of population).

Nominal wages rose 8.2 percent year-on-year to an average RUB 36200. Real pay went up 2 percent, following 1.9 percent growth in the previous month and in line with market expectations. Real disposable income decreased 5.9 percent, compared to 1.5 percent in September.




Friday November 11 2016
Russia Trade Surplus Above Expectations in September
Yekaterina Guchshina| yekaterina@tradingeconomics.com

Russia's trade surplus decreased to $7.38 billion in September 2016, from a $9.5 billion surplus a year earlier while above market expectations of $6.9 billion. Exports dropped 3 percent, the lowest decline since August 2014. Meanwhile, imports rose for the second consecutive month by 7.9 percent. Considering the first nine months of the year, the trade surplus shrank 46.6 percent to USD 63.1 billion, as exports fell 23.4 percent and imports declined 4 percent.

Exports shrank 3 percent year-on-year to USD 25.5 billion. Sales fell for the 28th straight month in a row while the least since August 2014. Imports went up 7.9 percent to USD 18.1 billion, for the second consecutive month, central bank data showed.

The trade surplus with non-CIS countries declined 24.4 percent to USD 5.7 billion while with CIS countries fell at a slower 14.3 percent to USD 1.6 billion.




Thursday November 03 2016
Russia Inflation Rate at Near 3-Year Low of 6.1%
Federal State Statistics Service | Yekaterina Guchshina | yekaterina@tradingeconomics.com

Consumer prices in Russia increased 6.1 percent year-on-year in October of 2016, following 6.4 percent growth in the previous month and below market expectations of 6.2 percent. It was the lowest inflation rate since January 2014, as prices rose at a slower pace for food, housing and utilities, clothing and footwear, transport, furnishings and recreation and culture. On a monthly basis, prices went up 0.4 percent.

Prices rose at a slower pace for food (+5.5 percent from +5.8 percent in September); housing and utilities (+5.3 percent from +5.4 percent); clothing and footwear (+8.1 percent from +8.7 percent); recreation and culture (+6.5 percent from +6.7 percent); furnishings and household equipment (+6 percent from +6.6 percent); transport (+5.7 percent from +6.1 percent); and alcoholic beverages and tobacco  (+8.9 percent from +9.3 percent)

Annual core inflation rate declined to 6.4 percent from 6.7 percent in September.

On a monthly basis, consumer prices rose 0.4 percent, after 0.2 percent growth in the previous month. Main upward pressure came from: food (+0.9 percent); housing and utilities (+0.2 percent); clothing (+1 percent); furnishings (+0.3 percent); restaurants and hotels (+0.4 percent); education (+0.2 percent) and alcoholic beverages and tobacco (+0.5 percent). In contrast, prices fell 0.2 percent for transport and 0.4 percent for recreation and culture.




Friday October 28 2016
Russia Holds Key Rate at 10%
Central Bank of the Russian Federation | Yekaterina Guchshina | yekaterina@tradingeconomics.com

The Central Bank of Russia kept its benchmark one-week repo rate unchanged at 10 percent on October 28th and signaled the rate will be maintained till end-2016 with its further possible cuts in 2017 Q1-Q2. Policymakers also said the dynamics of inflation and economic activity were overall in line with the forecast. At the same time, inflation is slowing down to a great extent on the back of temporary factors, while deceleration in inflation expectations remains unsteady. Annual growth in consumer prices is set to total less than 4.5 percent for October 2017, dropping to the target level of 4 percent by the end of 2017.

Information Notice of Bank of Russia:

First.  Annual inflation continues its decline in line with the Bank of Russia’s baseline forecast; however, this is largely due to temporary factors. Estimates as of 24 October indicate that annual consumer price growth was down to 6.2% from 6.4% seen in September. A meaningful contribution to the inflation reduction is made by the performance of the ruble exchange rate as oil prices have been higher than expected and Russian financial assets are becoming more attractive to external investors. Also, the good harvest helped lower food price growth. The disinflationary impact of domestic demand is however going down, which translates into slower deceleration of non-food product prices. Households have thus far been abiding by a saving-oriented model of behaviour. However, tentative signs of rising real wages may contribute to a gradual recovery in demand for goods and services. The key rate held at the current level long enough is expected to determine monetary conditions further on, which are critical to support incentives to save and shore up the trend towards sustainable inflation reduction, impacted by demand-side constraints. This will enable a further decline in inflation expectations. 

Second.The level of interest rates in the financial market is responsible for moderately tight monetary conditions, expected to remain in the economy long enough. Positive real interest rates will be held at a level which, while securing demand for credit, will exclude heightened inflationary pressure and keep incentives to save. Tentative signs of recovery in consumer lending do not bear substantial inflation risks so far given that a considerable part of current loans is used to refinance previously extended loans.

Third.The revival of production remains unstable and varies across industries and regions. The Bank of Russia estimates that moderately tight monetary conditions do not hinder economic recovery, with structural factors being the main restrictions. The labour market is adjusting to the new economic environment, and unemployment remains stable and low. Import substitution is progressing and certain items of non-commodity exports show an upward trend. Industry, including high-tech production, finds new growth factors. However, they are still unable to ensure that overall production dynamics remains sustainably positive. At the same time, individual industries are stagnant or show lower output growth. The emerging signs of recovery in investment activity are persistently weak. Positive trends need time to develop and root. The year 2016 will see an overall 0.5-0.7% drop in the output of goods and services, while the fourth quarter is expected to post a slight quarterly growth. In 2017, economic growth will be low (under 1%). This forecast is based on conservative assumptions about low growth of the global economy, average oil prices of about $40 per barrel, moderate capital outflow, and persistent structural restrictions of Russian economic development.

Fourth. Risks remain that the 4% inflation target may not be reached in 2017. This mainly results from inertial inflation expectations, possible weakening of households’ propensity to save, and higher real wages not supported with a rise in labour productivity. No legislative decision has yet been taken with regard to specific medium-term fiscal consolidation measures, including the indexation of wages in the public sector and social benefits. Volatility of global commodity and financial markets may also have a negative impact on exchange rate and inflation expectations.




Wednesday October 19 2016
Russia Jobless Rate Steady at 5.2% in September
Federal State Statistics Service | Yekaterina Guchsina | yekaterina@tradingeconomics.com

Russian unemployment rate remained unchanged at 5.2 percent in September of 2016 compared with a previous month and in a line with market expectations.

The number of unemployed people decreased by 19 thousand to 4.018 million in September. A year earlier, the figure was 4.032 million. 

Meanwhile, the number of economically active population decreased by 0.4 million to 77.1 million (53 percent of population). Compared to September of 2015, the figure increased by 0.1 million. 

Nominal wages rose 9.4 percent year-on-year to an average RUB 36115. Real pay went up 2.8 percent, following 2.7 percent growth in the previous month and above market expectations of 0.6 percent drop. Real disposable income decreased 2.8 percent, compared to 8.2 percent in August.


Wednesday October 12 2016
Russia Trade Surplus Narrows 44.4% YoY in August
Yekaterina Guchshina | yekaterina@tradingeconomics.com

Russia's trade surplus decreased to $4.9 billion in August 2016, from a $8.8 billion surplus a year earlier and well below market expectations of $7.2 billion. It was the lowest trade surplus since April 2009, as exports dropped 7.2 percent while imports rose for the first time since December 2013 by 13 percent. Considering the first eight months of the year, the trade surplus shrank 48.7 percent to USD 55.7 billion, as exports fell 25.7 percent and imports declined 5.6 percent.

Exports shrank 7.2 percent year-on-year to USD 23.3 billion. Sales fell for the 27th straight month in a row while the least since October 2014. Imports went up 13 percent to USD 18.4 billion, for the first time since December 2013 and the most since January 2013, central bank data showed.

The trade surplus with non-CIS countries declined 41.6 percent to USD 51 billion while with CIS countries fell at a slower 24 percent to USD 1.3 billion.

According to more detailed data from Russian Customs Statistics, trade surplus went down to $5.8 billion in August compared to $9.9 billion a year ago. Exports decreased by 7.5 percent to USD 23.4 billion. Imports rose 14.2 percent to $17.6 billion.

Exports to non-CIS countries decreased by 7.5 percent to $20.2 billion. The biggest drop was reported for: fuels and energy products (-11 percent to $13.1 billion) followed by chemical products (-22 percent to $0.96 billion) and machinery and equipment (-0.8 percent to $1.1 billion). In contrast, shipments of foodstuffs and raw materials rose by 4.8 percent to $1.1 billion and metals increased 10 percent to $2.4 billion. Exports to CIS countries dropped by 7.4 percent to $3.1 billion led by: fuels and energy products (-19 percent to $0.8 billion); machinery and equipment (-4.5 percent to $0.2 billion); chemical products (-4 percent to $0.5 billion); metals (-8 percent to $0.4 billion). In contrast, sales rose for foodstuffs and raw materials by 22 percent to $0.4 billion.  

Imports from non-CIS countries jumped 16.2 percent to USD 15.8 billion. The biggest increase was reported for: machinery and equipment (+33 percent to $8.5 billion), followed by foodstuffs and raw materials (+16 percent to $1.5 billion); chemical products (+8.3 percent to $2.7 billion);  textiles and footwear (+ 4.4 percent to $1.1 billion) and metals (+7 percent to $0.8 billion). Purchases from CIS countries went down by 1 to $1.7 billion led by fuels and energy products (-70 percent to $0.07 billion). In contrast, outbound purchases rose for chemical products (+15.1 percent to $0.2 billion) and metals (+10 percent to $0.4 billion) and foodstuffs and raw materials (+24 percent to $0.4 billion).

The main trade partners in January-August of 2016 were: China (-3.1 percent year-on-year to $40.2 billion trade turnover); Germany (-18.5 percent year-on-year to $24.9 billion); the Netherlands (-33.3 percent year-on-year to $20.5 billion); Italy (-42.6 percent year-on-year to $12.6 billion); the USA (-15.5 percent to $12.2 billion); Turkey (-39.5 percent to 9.9 billion USD); Japan (-29 percent to $10.1 billion).


Tuesday October 04 2016
Russia Inflation Rate at 2-1/2-Year Low of 6.4%
Federal State Statistics Service | Yekaterina Guchshina | yekaterina@tradingeconomics.com

Consumer prices in Russia increased 6.4 percent year-on-year in September of 2016, following 6.9 percent growth in the previous month and below market expectations of 6.6 percent. It was the lowest inflation rate since February 2014, as food, housing and utilities, clothing and footwear, transport prices rose at a slower pace. On a monthly basis, prices went up 0.2 percent.

Prices grew at a slower pace for food (+5.8 percent from +6.4 percent in August); housing and utilities (+5.4 percent from +5.6 percent); clothing and footwear (+8.7 percent from +9.2 percent); recreation and culture (+6.7 percent from +6.8 percent); furnishings and household equipment (+6.6 percent from +7.3 percent); transport (+6.1 percent from +6.4 percent); restaurants and hotels (+5.7 percent from +5.9 percent) and alcoholic beverages and tobacco  (+9.3 percent from +9.5 percent)

Annual core inflation rate declined to 6.7 percent from 7.4 percent in August.

On a monthly basis, consumer prices rose 0.2 percent, after being flat in the previous month. A drop in food prices (-0.3 percent) was offset by increases for housing and utilities (+0.1 percent); clothing (+1.1 percent); furnishings (+0.3 percent); restaurants and hotels (+0.5 percent); education (+4.8 percent) and alcoholic beverages and tobacco (+0.7 percent). 


Monday September 19 2016
Russia Jobless Rate Falls Unexpectedly to 5.2% in August
Federal State Statistics Service | Yekaterina Guchshina | yekaterina@tradingeconomics.com

Russian unemployment rate declined to 5.2 percent in August of 2016, compared to 5.3 percent in the previous month and well below market expectations of 5.4 percent. It was the lowest jobless rate since September 2015, as the number of unemployed people decreased by 88 thousand to 4.037 million while economically active increased by 0.6 million to 77.5 million (53 percent of population).

The number of unemployed people decreased by 88 thousand to 4.037 million in August. A year earlier, the figure was 4.067 million. 

The number of economically active people increased by 0.6 million to 77.5 million (53 percent of population). Compared to August of 2015, the figure increased by 0.1 million. 

Nominal wages rose 5.8 percent year-on-year to an average RUB 34095 while real pay fell 1 percent. Real disposable income decreased 8.3 percent.


Friday September 16 2016
Russia Cuts Key Rate to 10%
Central Bank of the Russian Federation | Yekaterina Guchshina | yekaterina@tradingeconomics.com

The Central Bank of Russia lowered its benchmark one-week repo rate by 50bps to 10 percent on September 16th, and signaled the rate will be maintained till end-2016 with its further possible cuts in 2017 Q1-Q2. Policymakers also said inflation expectations had decreased while economic activity remained unstable. Annual inflation rate declined to two-year low 6.9 percent in August, following 7.2 percent in the previous month.

Information Notice of Bank of Russia:

First. Inflation has demonstrated a noticeable decline in line with the Bank of Russia’s baseline forecast. By estimates, the annual consumer price growth fell to 6.6% as of 12 September 2016 compared to 7.2% in July. However, the inflation slowdown was specifically shaped by the ruble dynamics amid more favourable external economic environment than expected earlier. The reluctant slowing in non-food goods price growth observed at this juncture signals the weakening in the disinflationary effects on the part of the domestic demand. Over recent months, seasonally smoothed indicators of consumer price monthly growth remained elevated. Keeping the key rate at 10.00 % p.a. during a rather long period of time will shape monetary conditions conducive for the trend towards a further persistent slowdown in inflation under the influence of demand-side constraints. Ruble stabilisation and the good harvest outlook will also contribute to lowering consumer price growth. This will install conditions for a further drop in inflation expectations. Considering the decision made and persistent moderately tight monetary policy, the annual inflation, as forecast by the Bank of Russia, will be around 4.5% in September 2017 to reach the 4% target by late 2017.

Second. The Bank of Russia expects that the decision made and maintenance of the key rate at the level it reached will bring down inflation expectations. At present, the structure of market interest rates by maturity and survey findings indicate that, in contrast to the Bank of Russia, market players forecast a faster drop in interest rates. Additionally, their end-2017 inflation forecasts exceed the 4% target of the central bank. In reality, the decrease of nominal rates has a limited capacity, and the economy will maintain moderately tight monetary conditions for quite a long period of time. This is implied by the need to keep positive real interest rates at the level supporting demand for credit that does not raise inflationary pressure and keeps incentives for saving.

Third. Persistent revival in production activity is still unstable and patchy across industries and regions. According to Bank of Russia estimates, the moderately tight monetary conditions do not hamper recovery in economy, whereas the main obstacles are caused by structural effects. The labour market tries to adjust to new economic conditions, and the unemployment remains stable and low. Import substitution steps up and non-commodity exports expand for certain items. Industry, including technology-intensive production types, discovers new opportunities for growth. Nonetheless, they fail to ensure an overall robust positive production dynamics. At the same time, certain industries stagnate or show slowdown in output growth, while investment continues to contract. More time is needed for positive trends to develop and get rooted. Positive quarterly GDP growth is possible in the second half of this year, however in 2017, GDP growth will not be high, staying below 1%. This forecast is based on the conservative assumptions of sluggish growth in global economy, average annual oil price staying around $40 per barrel and persistent structural constraints for the Russian economic development.

Fourth. The risks of failure to deliver the inflation at the 4% target in 2017 persist mainly due to the inertia of inflation expectations and potential weaker household saving motives. Specific fiscal consolidation measures, including wage and social payments indexation, remain uncertain over the mid-term horizon. Volatility in global commodity and financial markets may produce a negative impact on exchange rate and inflation expectations.


Friday September 09 2016
Russia Trade Surplus at Fresh 7-Year Low in July
Yekaterina Guchshina | yekaterina@tradingeconomics.com

Russia's trade surplus decreased to $6.5 billion in July 2016, from a $10.6 billion surplus a year earlier while above market expectations of $6.1 billion. It was the lowest trade surplus since April 2009, as exports dropped at a faster 17.5 percent than 4.1 percent fall in imports. Considering the first seven months of the year, the trade surplus shrank 48.7 percent to USD 51.249 billion, as exports fell 27.8 percent and imports declined 8.6 percent.

Exports shrank 17.5 percent year-on-year to USD 22.5 billion while imports decreased 4.1 percent to USD 16 billion, central bank data showed.

The trade surplus with non-CIS countries declined 41.6 percent to USD 51 billion while with CIS countries fell at a slower 24 percent to USD 1.3 billion.

According to more detailed data from Russian Customs Statistics, trade surplus went down by 45.7 percent year-on-year to USD 57.7 billion in January-July 2016. Exports decreased by 27.1 percent to USD 152.5 billion. Imports fell 7.7 percent to USD 94.8 billion.

Exports to non-CIS countries decreased by 38.4 percent to USD 112.7 billion. The biggest drop was reported for: fuels and energy products (- 34.4 percent) followed by metals (-22.3 percent); chemical products (- 28 percent) and machinery and equipment (-6.4 percent). In contrast, shipments of foodstuffs and raw materials rose by 7.3 percent. Exports to CIS countries dropped by 23.7 percent to USD 19.8 billion with all categories reporting declines: fuels and energy products (-36 percent); machinery and equipment (-18.3 percent); chemical products (-5.3 percent); metals (-16.3 percent) and foodstuffs and raw materials (-8.1 percent).  

Imports from non-CIS countries declined 6.4 percent to USD 84.5 billion. The biggest drop was reported for: machinery and equipment (-5.1 percent), followed by chemical products (-3.7 percent); foodstuffs and raw materials (-10.2 percent); textiles and footwear (-7.3 percent); metals (-11.4 percent). Purchases from CIS countries went down by 14.8 to USD 10.2 billion led by chemical products (-21.4 percent) and metals (-8.8 percent). In contrast, purchases rose for machinery and equipment (+0.7 percent) and foodstuffs and raw materials (+9.2 percent).

The main trade partners in January-July of 2016 were: China (-6.8 percent year-on-year to 33.6 billion USD trade turnover); Germany (-21.4 percent year-on-year to 21.4 billion USD); the Netherlands (-33.1 percent year-on-year to 18.3 billion USD); Italy (-44.8 percent year-on-year to 10.8 billion USD); the USA (down by 21.8 percent to 7 billion USD); Turkey (-40.3 percent to 8.6 billion USD); Japan (-33.5 percent to 8.6 billion USD)