Friday May 24 2019
Russia Jobless Rate Unchanged at 5-Month Low
Federal State Statistics Service | Joana Ferreira | joana.ferreira@tradingeconomics.com

Russia unemployment rate stood at 4.7 percent in April 2019, unchanged from the previous month's five-month low and in line with market expectations.

The number of unemployed rose by 36 thousand to 3.554 million in April from 3.518 million in the previous month. Compared with the previous year, unemployment fell by 158 thousand from 3.712 million.

Meanwhile, registered unemployment came in at 0.817 million, little-changed from March's 0.818 million and above last year's 0.758 million.

Russia’s real wages were up 1.6 from the previous year in April, easing from a 2.3 percent advance in March and beating market expectations of a 0.2 percent rise. Average nominal wages jumped 6.9 percent to RUB 47,020 while annual inflation rate was at 5.2 percent.




Friday May 17 2019
Russia GDP Growth Slows to Over 2-Year Low in Q1
Federal State Statistics Service | Joana Ferreira | joana.ferreira@tradingeconomics.com

Russia's gross domestic product grew by 0.5 percent year-on-year in the first quarter of 2019, easing from a 2.7 percent expansion reported in the previous period, preliminary data showed. That was the weakest growth rate since the last quarter of 2016.

GDP growth for the first quarter came in below the Ministry of Economic Development's early estimate of 0.8 percent. According to figures released last month, a slowdown had been expected for all major sectors: agriculture (1.1 percent vs 4.1 percent in Q4); construction (0.2 percent vs 4.1 percent); retail trade (1.8 percent vs 2.8 percent); freight turnover of transport (2.1 percent vs 2.3 percent); and industry (2.1 percent vs 2.7 percent).

The Federal State Statistics Service did not provide any further details on the revised figure.




Tuesday May 07 2019
Russia Inflation Rate Slows to 5.2% in April
Federal State Statistics Service | Agna Gabriel | agna.gabriel@tradingeconomics.com

The annual inflation rate in Russia decreased to 5.2 percent in April of 2019 from 5.3 percent in the previous month and in line with market expectations.

Within the goods component, non-food products prices advanced 4.6 percent, slightly slower than 4.7 percent in the previous month and food cost increased 5.8 percent, easing from a 5.9 percent rise in March. Also, services inflation was unchanged at 5.1 percent in April.

Annual core inflation rate came in at 4.6 percent in April, unchanged from the prior month, remaining at its highest level since February of 2017. 

On a monthly basis, consumer prices went up 0.3 percent, the same as in the previous month and matching market consensus. Upward pressure came from all main categories: food (0.4 percent from 0.5 percent); non-food products (0.2 percent from 0.3 percent); and services (0.2 percent from 0.1 percent).




Friday April 26 2019
Russia Holds Rates, Signals Future Cuts
Central Bank of the Russian Federation | Joana Ferreira | joana.ferreira@tradingeconomics.com

The Bank of Russia held its benchmark one-week repo rate at 7.75 percent during its April meeting, as widely expected, saying inflation started to slow after hitting a two-year high in March. Policymakers also said that the decision to hike rates in September and December were sufficient to curb the effects of one-off pro-inflationary factors and that there is a possibility of turning to cutting the key rate in Q2-Q3 2019. The bank expects annual inflation to return to 4 percent in the first half of 2020.

Excerpts from the Information Notice of Bank of Russia:

Inflation dynamics. In March, annual inflation passed the local peak. The annual consumer price growth rate increased to 5.3% in March (from 5.2% in February 2019). In April, annual inflation started to slow down and declined to 5.1%, according to the estimate as of 22 April. Consumer prices current growth rates tend to be somewhat below the Bank of Russia’s forecast. The VAT increase pass-through to prices has largely materialised.

The Bank of Russia’s pre-emptive key rate hikes in September and December 2018 helped return annualised monthly consumer price growth rates to levels close to 4%. Consumer demand trends constrain inflation. Also, temporary disinflationary factors contributed to slowing consumer price growth, among those ruble appreciation since the beginning of the year, and declining prices for principal types of motor fuel and certain food products in March-April compared to February readings.

In April, inflation expectations of households rose slightly after a tangible drop in March. Business price expectations continued to decline but remain at an elevated level.

According to the Bank of Russia’s forecast, annual inflation will return to 4% in the first half of 2020.

Economic activity. Rosstat’s revision of 2014-2018 GDP data has not changed the Bank of Russia’s view of the current state of the economy — it is close to the potential. Current consumer demand trends and labour market conditions create no excessive inflationary pressure. In the first quarter, industrial production grew moderately year on year and somewhat below the reading of 2018 Q4. Investment activity remains muted. Annual retail sales growth declined in the first quarter as a result of the VAT increase and the slowdown in wage growth.

The Bank of Russia expects GDP to grow by 1.2-1.7% in 2019. The VAT hike slightly constrained business activity. The incremental budget revenues will be used to raise government spending, including investment, as early as 2019. Subsequent years might see higher economic growth rates as national projects are implemented.

Inflation risks. Short-term proinflationary risks have abated. With respect to internal conditions, the secondary effects of the VAT increase are seen as immaterial and accelerated price growth in certain food products became less of a risk.

That said, significant risks are posed by elevated and unanchored inflation expectations, as well as by external factors. In particular, the risk of a slowdown in global economic growth still looms. Geopolitical factors might lead to strengthened volatility in global commodity and financial markets, affecting exchange rate and inflation expectations. Supply-side factors in the oil market may amplify the volatility of global oil prices. At the same time, the revision of the interest rate paths by the US Fed and other central banks in advanced economies in the first quarter constrains the risks of persistent capital outflows from emerging markets.

The Bank of Russia leaves mostly unchanged its assessment of risks associated with wage movements, possible changes in consumer behaviour and budget expenditures. These risks remain moderate.




Thursday April 18 2019
Russia Jobless Rate at 5-Month Low of 4.7%
Federal State Statistics Service | Agna Gabriel | agna.gabriel@tradingeconomics.com

Russia unemployment rate fell to 4.7 percent in March of 2019 from 4.9 percent in the previous month, below market expectations of 4.9 percent and compared with last year’s 5 percent. It is the lowest jobless rate since October of 2018.

The number of unemployed fell by 137 thousand to 3.518 million in March from 3.655 million in the previous month. Compared with the previous year, unemployment fell by 290 thousand from 3.808 million.

Meanwhile, registered unemployment rose by 2 thousand to 0.818 million from 0.798 million a month earlier. Year-on-year, that number advanced by 3.4 thousand from 0.784 million.

Russia’s real wages showed no growth from the previous year in March, the same as in the previous month and compared with market expectations of a 0.5 percent rise. Average nominal wages jumped 5.2 percent to RUB 45,000 while annual inflation rate advanced to 5.3 percent, the highest since December of 2016.


Friday April 05 2019
Russia Inflation Rate Hits New 2-Year High
Federal State Statistics Service | Joana Ferreira | joana.ferreira@tradingeconomics.com

Russia’s consumer price inflation increased to 5.3 percent year-on-year in March 2019, the highest since December 2016, from 5.2 percent in the previous month and slightly below market expectations of 5.4 percent.

Within the goods component, non-food products prices advanced 4.7 percent, slightly faster than 4.6 percent in the previous month; while food cost increased 5.9 percent, the same pace as in February. Also, services inflation was unchanged at 5.1 percent in March.

Annual core inflation rate went up to 4.6 percent in March from 4.4 percent in the previous month. It was the highest rate since February 2017.

On a monthly basis, consumer prices rose 0.3 percent, after a 0.4 percent gain in February and also missing market consensus of 0.4 percent. Upward pressure came from all main categories: food (0.5 percent vs 0.8 percent); non-food products (0.3 percent, the same as in February); and services (0.1 percent vs 0.2 percent).


Tuesday April 02 2019
Russia GDP Growth Accelerates to 2.7% in Q4
Federal State Statistics Service | Joana Ferreira | joana.ferreira@tradingeconomics.com

Russia's gross domestic product grew by 2.7 percent year-on-year in the fourth quarter of 2018, following an upwardly revised 2.2 percent expansion reported in the previous three-month period.

Within the service sector, growth accelerated for: information & communication (2.7 percent vs 1.3 percent in Q3); financial & insurance activities (7.9 percent vs 7 percent); real estate activities (0.3 percent vs 0.2 percent); and administrative & support service activities (2.9 percent vs 2.4 percent). Meanwhile, the rate of expansion was unchanged for wholesale & retail trade (at 2.2 percent), transportation & storage (at 3.2 percent) and public administration & defense (at 3.3 percent); while it slowed for accommodation & food service activities (4.4 percent vs 8.1 percent), culture, sports, leisure and entertainment output (0.6 percent vs 0.8 percent), and professional, scientific and technical activities (0.1 percent vs 1.6 percent).

Within industrial activity, mining output grew the most (7.7 percent vs 4.7 percent), followed by water supply, water disposal, organization of waste collection & disposal, pollution control activities (6.5 percent vs 4.3 percent) and electricity, gas & steam, air conditioning (1.2 percent vs 1 percent). Meanwhile, manufacturing growth slowed sharply to 0.2 percent from 1.3 percent in Q3, and construction output rose at a slower 4.9 percent, compared to 6.6 percent in the previous period.

Agriculture, forestry & fishing surged 2.3 percent in the three months to December, recovering from a 4.8 percent contraction in the third quarter.

Considering 2018 full year, the Russian economy grew 2.3 percent, the strongest pace of expansion in six years.


Friday March 22 2019
Russia Holds Key Interest Rate Steady at 7.75%
Central Bank of the Russian Federation | Agna Gabriel | agna.gabriel@tradingeconomics.com

The Bank of Russia left its benchmark one-week repo rate at 7.75 percent on March 22nd, in line with market expectations, saying inflation is holding lower than expected after a VAT increase in January. Also, policymakers said short-term pro-inflationary risks have decreased. The central bank lowered its end-of-year annual inflation forecast in 2019 to 4.7-5.2 percent from 5.0-5.5 percent previously expected, before returning to 4 percent in the first half of 2020.

Excerpts from the Information Notice of Bank of Russia:

Inflation dynamics. In February—March 2019, annual inflation is holding lower than the Bank of Russia’s expectations. In February, annual consumer price growth rate rose to 5.2% (vs 5.0% in January 2019). As of 18 March, annual inflation was 5.3%. The VAT increase pass-through to prices has largely materialised. Its contribution to annual inflation was around 0.6-0.7 pp, which corresponds to the lower bound of the Bank of Russia expectations range. Certain deferred effects of the VAT hike may manifest themselves in the months to come. An accurate assessment of the VAT increase effect on inflation can be made in the second quarter of the current year.

According to the Bank of Russia’s forecast, annual inflation will pass its local peak in March—April 2019. That said, the Bank of Russia has lowered its end-of-year annual inflation forecast in 2019 from 5.0-5.5% to 4.7-5.2%. Quarterly year-on-year consumer price growth is set to decelerate to 4% as early as the second half of 2019. Annual inflation will return to 4% in the first half of 2020 when the effects of ruble’s weakening in 2018 and the VAT rise peter out. 

Economic activity. The economy is close to its potential. Current consumer demand movements and labour market conditions do not generate excessive inflationary pressure. In January—February, annual industrial production growth was the same as in 2018 Q4. Investment activity growth is still moderate. As predicted by the Bank of Russia’s forecast, annual retail sales growth declined in January—February as a result of the VAT increase and a slowdown in wage growth. The Bank of Russia maintains its 2019 GDP growth forecast in the range of 1.2-1.7%. The VAT hike slightly constrains business activity. Newly attracted budgetary funds will be used to boost government spending, including spending on investments, as early as 2019. Subsequent years might see higher economic growth rates as national projects are implemented.

The Bank of Russia maintains its 2019 GDP growth forecast in the range of 1.2-1.7%. The VAT hike slightly constrains business activity. Newly attracted budgetary funds will be used to boost government spending, including spending on investments, as early as 2019. Subsequent years might see higher economic growth rates as national projects are implemented.

Inflation risks. Short-term pro-inflationary risks have abated. With regard to internal conditions, secondary effects of the VAT increase and enhanced growth in prices of certain food products became less of a risk. As for external conditions, the revision of interest rates path by the US Fed and other central banks in advanced economies reduces the risks of persistent capital outflows from emerging markets.

The Bank of Russia leaves mostly unchanged its assessment of risks associated with wage movements, possible changes in consumer behaviour and budget expenditures. These risks remain moderate.

In its key rate decision-making, the Bank of Russia will take into account inflation and economic dynamics against the forecast, as well as risks posed by external conditions and the reaction of financial markets. If the situation develops in line with the baseline forecast, the Bank of Russia admits the possibility of turning to cutting the key rate in 2019.


Wednesday March 20 2019
Russia Unemployment Rate Unchanged at 4.9% in February
Federal State Statistics Service | Agna Gabriel | agna.gabriel@tradingeconomics.com

Russia Unemployment rate stood at 4.9 percent in February of 2019, unchanged from the previous month, in line with market expectations and compared with last year’s 5.2 percent.

The number of unemployed fell by 12 thousand to 3.655 million in February from 3.667 million in the previous month. Compared with the previous year, unemployment fell by 153 thousand from 3.808 million.

Meanwhile, registered unemployment rose by 65 thousand to 0.798 million from 0.733 million a month earlier. Year-on-year, that number dropped by 1 thousand from 0.799 million.

Russia's real wages increased by 0.7 percent year-on-year in February, following an upwardly revised 1.1 percent advance in the previous month and higher than market expectations of a flat reading. Average nominal wages jumped 6 percent to RUB 43,030 while annual inflation rate rose to 5.2 percent, the highest level since December of 2016.


Wednesday March 06 2019
Russia Inflation Rate Rises to Over 2-Year High as Expected
Federal State Statistics Service | Agna Gabriel | agna.gabriel@tradingeconomics.com

The annual inflation rate in Russia increased to 5.2 percent in February of 2019 from 5 percent in the previous month, in line with market expectations. It was the highest inflation rate since December of 2016, boosted by prices of food, non-food products and services. In January of 2019, the government raised VAT to 20 percent from 18 percent.

Within the goods component, food cost advanced 5.9 percent in February, following a 5.5 percent rise in January and prices of non-food products rose 4.6 percent, after a 4.5 percent gain in the previous month. Also, services inflation picked up to 5.1 percent in February from 5 percent in January.

Annual core inflation rate climbed to 4.4 percent in February from 4.1 percent in the previous month. It was the highest rate since March of 2017.

On a monthly basis, consumer prices went up 0.4 percent, after a 1 percent rise in prior month and matching market consensus. Upward pressure came from all main categories: food (0.8 percent from 1.3 percent); non-food products (0.3 percent from 0.6 percent); and services (0.2 percent vs 1.1 percent).