Wednesday June 20 2018
Russia May Jobless Rate Lowest Since 1992
Federal State Statistics Service | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The unemployment rate in Russia went down to 4.7 percent in May of 2018 from 5.2 percent in the corresponding month of the previous year, below market expectations of 4.9 percent. It was the lowest jobless rate since at least October 1992. In April, the jobless rate was higher at 4.9 percent.

The number of unemployed people decreased by 337 thousand to 3.608 million in May 2018 from 3.945 million in the same month of the previous year. Compared to April, the number of unemployed fell by 104 thousand.

Real wages grew 7.3 percent year-on-year in May of 2018, easing from a downwardly revised 7.6 percent rise in the previous month and missing market expectations of 7.5 percent. Average nominal wages went up 9.9 percent to RUB 43,815 while annual inflation rate stood at 2.4 percent, close to a record low of 2.2 percent in February and January. On the other hand, real disposable income increased by only 0.3 percent in May, following a 5.7 percent growth in the preceding month.




Monday June 18 2018
Russia GDP Growth Confirmed at 1.3% YoY in Q1
Federal State Statistics Service | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Russia's gross domestic product advanced by 1.3 percent year-on-year in the first quarter of 2018, matching the preliminary estimate and following a 0.9 percent growth in the previous period. The stronger expansion was mainly driven by gains in financial and insurance, real estate activities and public administration. In addition, output rebounded for manufacturing and mining.

The services sector contributed significantly to growth, as sharper rises were reported for: financial and insurance activities (5.9 percent from 5.3 percent in Q4); real estate activities (3.9 percent from 2.4 percent); public administration and defence; compulsory social security (2.3 percent from 0.8 percent) and professional, scientific and technical activities (2.8 percent from 2.2 percent). Meanwhile, wholesale and retail trade showed no growth (from 3.6 percent in Q4) and output slowed for transportation and storage (0.9 percent from 1.1 percent); accommodation and food service activities (3.4 percent from 3.9 percent); information and communication (0.3 percent from 7 percent) and administrative and support service activities (0.6 percent from 3.4 percent).

Within industrial activity, output recovered for: manufacturing (1.9 percent from -2.8 percent); mining and quarrying (0.7 percent from -0.9 percent); electricity, gas and steam, air conditioning (2.1 percent from -4.1 percent); water supply, water disposal, organization of waste collection and disposal, pollution control activities (0.2 percent from -1.8 percent). In contrast, the construction sector contracted (-5.1 percent from 1.7 percent).

In addition, agriculture, forestry and fishing shrank by 0.1 percent, compared to a 0.5 percent fall in the fourth quarter of 2017.




Friday June 15 2018
Russia Holds Policy Rate at 7.25%
Central Bank of the Russian Federation | Joana Ferreira | joana.ferreira@tradingeconomics.com

The Bank of Russia held its benchmark one-week repo rate at 7.25 percent on June 15th, as widely expected, after revising the inflation forecast upwards due to a planned increase of the value added tax in 2019. Policymakers now expect annual inflation to be 3.5-4 percent in late 2018 and increase for a short-term period to 4-4.5 percent in 2019, before returning to 4 percent in early 2020.

Excerpts from the Information Notice of Bank of Russia:

Annual inflation in general corresponds to the Bank of Russia’s expectations. In April and May, the annual consumer price growth rate remained at the March level totalling 2.4%.

Inflation for main consumer basket product groups showed mixed dynamics. On the one hand, amid growing global oil prices coupled with the increase in excises early this year, the prices of oil products in the domestic market saw a tangible rise. This factor was the key contributor to the growth of annual inflation for non-food goods up to 3.4% in May (vs 2.7% in April). The adopted decision to lower the excises for oil products from 1 June 2018 will help to slow down the price growth for this product group by the end of this year. On the other hand, fruit and vegetable prices saw a substantial decline, which led to the drop in annual food inflation to 0.4% in May (vs 1.1% in April). This is related to continuing high supply of food products.

Inflation expectations of households and businesses saw a slight increase, which is primarily related to higher petrol prices. The weakening of ruble exchange rate in April moderately affects the dynamics of inflation and inflation expectations. In the coming months, prices will continue to adapt to the established level of the exchange rate and prices of oil products.

According to the Bank of Russia estimates, planned tax revisions will make about a 1 percentage point contribution to inflation. Partially this effect may take place this year.

The Bank of Russia forecasts annual inflation to be 3.5–4% in late 2018 and increase for a short-term period to 4–4.5% in 2019. The consumer price growth rate will return to 4% in early 2020.

2018 Q1 annual GDP growth was slightly below the March forecast, totalling 1.3%. This resulted from a slower than expected growth of fixed capital investment, including a decline in construction, together with the review of the data for 2017 by Rosstat. April saw improved investment and industrial activity, confirming the temporary nature of slower economic growth in March 2018. In view of this, the Bank of Russia kept unchanged its 2018 annual GDP growth forecast of 1.5–2%, which is in line with the potential economic growth rate. In 2019–2020, economic growth will stay close to the said figure. The Bank of Russia’s forecast might be further updated to reflect a detailed estimate of influence that the set of fiscal measures, announced on 14 June 2018, will have on economic performance. Although in the medium term if the scheduled measures are successfully implemented the expected economic growth could be faster compared to the Bank of Russia’s baseline forecast.




Monday June 11 2018
Russia April Trade Surplus Larger than Expected
Joana Ferreira | joana.ferreira@tradingeconomics.com

Russia's trade surplus widened by 95.5 percent to USD 15.32 billion in April 2018 from USD 7.83 billion in the same month a year earlier, beating market expectations of a USD 14.0 billion surplus.

Exports jumped 38.9 percent to USD 36.25 billion in April from USD 26.10 billion a year ago, as exports to non-CIS countries climbed 41.6 percent to USD 31.52 billion and those to CIS countries went up 23.4 percent to USD 4.72 billion. 

Imports went up at a softer 14.6 percent to USD 20.93 billion from USD 18.26 billion a year earlier. Imports from non-CIS countries increased 14.4 percent to USD 18.65 billion and those from CIS countries advanced 16.1 percent to USD 2.28 billion. 

The trade surplus with non-CIS countries grew 115.6 percent to USD 12.87 billion from USD 5.97 billion a year ago; and with CIS countries it widened 31 percent to USD 2.44 billion from USD 1.86 billion.

Considering January-April, the trade surplus widened to USD 59.50 billion from USD 42.32 billion in the same period of 2017.




Tuesday June 05 2018
Russian Inflation Rate Unchanged in May
Federal State Statistics Service | Joana Ferreira | joana.ferreira@tradingeconomics.com

Russia's annual inflation rate came in at 2.4 percent in May 2018, unchanged from the previous month's reading and slightly below market expectations of 2.5 percent.

Within the goods component, food inflation eased further to 0.4 percent in May from 1.1 percent in the previous month; while prices of non-food products rose by 3.4 percent, faster than a 2.7 percent gain in April. Also, cost of services went up by 4 percent in May, the same pace as in the precedent period.

Annual core inflation rate picked up to 2 percent in May from 1.9 percent in April.

On a monthly basis, consumer prices increased by 0.4 percent in May, the same pace as in April and matching market expectations. Inflation rose for both non-food products (0.9 percent vs 0.4 percent) and services (0.4 percent vs 0.3 percent), while food prices dropped slightly (-0.1 percent vs 0.4 percent).




Tuesday May 22 2018
Russia Unemployment Rate Edges Down to 4.9%
Joana Taborda | joana.taborda@tradingeconomics.com

Russian unemployment rate declined to 4.9 percent in April of 2018 from 5.3 percent in the same month of the previous year, beating market expectations of 5 percent. In March, the jobless rate was 5 percent.

The number of unemployed people declined by 338 thousand to 3.712 million in April from 4.050 million in the corresponding month of the previous year. Compared to March, the number of unemployed fell by 96 thousand.

Real wages rose 7.8 percent year-on-year in April of 2018, easing only slightly from an upwardly revised 8.7 percent jump in the previous month and beating market expectations of 5.9 percent. Average nominal wages surged 10.4 percent to RUB 43,550 while annual inflation rate stood at 2.4 percent, close to a record low of 2.2 percent in February and January. Meanwhile, real disposable personal income increased by 5.7 percent in April, following a 4.5 percent growth in the previous month.


Wednesday May 16 2018
Russia Economy Grows 1.3% in Q1
Joana Ferreira | joana.ferreira@tradingeconomics.com

Russia's gross domestic product grew by 1.3 percent year-on-year in the first quarter of 2018, following a 0.9 percent expansion reported in the previous period, a preliminary estimate showed.

It was the sixth straight quarter of growth after two years of contraction.

The Ministry of Economic Development had previously estimated GDP growth in the first quarter at 1.1 percent.

The Bank of Russia recently lowered its estimate of GDP annual growth for the first quarter to 1.3-1.5 percent, from 1.5-1.8 percent previously estimated, due to the weakening of business activity in March amid unusual cold weather. While the low temperatures contributed to the growth of thermal and electric power production, supporting industrial production as a whole; they also led to a reduction in the volume of contract works in construction, which affected fixed assets investment.

The central bank also expects GDP growth to slow to 1-1.4 percent in the second quarter of 2018.



Friday May 11 2018
Russia Trade Surplus Widens Less than Expected
Joana Ferreira | joana.ferreira@tradingeconomics.com

Russia's trade surplus widened by 21.7 percent to USD 15.00 billion in March 2018 from USD 12.33 billion in the same month a year earlier, but below market expectations of USD 16.0 billion.

Exports increased 17.8 percent to USD 36.90 billion from USD 31.33 billion in March 2017, as exports to non-CIS countries advanced 17.4 percent to USD 32.06 billion and those to CIS countries went up 20.5 percent to USD 4.84 billion. 

Imports went up at a softer 15.2 percent to USD 21.90 billion from USD 19.00 billion a year earlier. Imports from non-CIS countries climbed 15.6 percent to USD 19.54 billion and those from CIS countries advanced 12.4 percent to USD 2.36 billion. 

The trade surplus with non-CIS countries grew 20.3 percent to USD 12.52 billion from USD 10.40 billion a year ago; and with CIS countries it widened 29.3 percent to USD 2.49 billion from USD 1.92 billion.

Considering the first quarter of the year, the trade surplus widened to USD 44.18 billion from USD 34.48 billion in the same period of 2017.


Friday May 04 2018
Russia April Inflation Rate Weaker than Expected
Federal State Statistics Service | Joana Ferreira | joana.ferreira@tradingeconomics.com

Russia's consumer price inflation stood at 2.4 percent year-on-year in April 2018, unchanged from the previous month's figure and below market expectations of 2.5 percent. Inflation remained well below the central bank's target of 4 percent.

Within the goods component, food inflation eased to 1.1 percent in April from 1.3 percent in the previous month; while prices of non-food products rose by 2.7 percent, faster than a 2.4 percent gain in March. Also, cost of services went up by 4 percent in April, after a 3.9 percent increase in the precedent period.

Annual core inflation rate picked up to 1.9 percent in April from an all-time low of 1.8 percent in March.

On a monthly basis, consumer prices increased by 0.4 percent, following a 0.3 percent gain in March and matching market expectations. Inflation rose for both non-food products (0.4 percent vs 0.2 percent) and services (0.3 percent vs 0.1 percent), while food prices rose at a softer rate (0.4 percent vs 0.5 percent).


Friday April 27 2018
Russia Holds Key Interest Rate at 7.25%
Central Bank of the Russian Federation | Joana Ferreira | joana.ferreira@tradingeconomics.com

The Bank of Russia held its benchmark one-week repo rate at 7.25 percent on April 27th, following five consecutive cuts, saying that a weaker ruble amid geopolitical tensions will boost inflation. Still, policymakers agreed that there are no risks of inflation overshooting the bank's 4 percent target. The bank also reiterated that monetary policy will become neutral in 2018 and that inflation is expected to be 3-4 percent in late 2018 and to remain close to 4 percent in 2019.

Information Notice of Bank of Russia:

Inflation remains low, driven by long-term factors including, in the first place, a moderate recovery in domestic demand.

Consumer prices grew at the pace of 2.4% in March, and consumer price growth in April is estimated at 2.3–2.5%. The recent weekly data on inflation are indicative of a still feeble response of consumer prices to the ruble weakening. The gradual depletion of the past year’s vegetable stocks and the related growth in imports contributed to an expected slight increase in both monthly and annual inflation between March and April, relative to February.

In March, household inflation expectations dropped to a historical low of 7.8%. That said, uncertainty is in place over how inflation expectations will respond to the April developments in financial markets.

The Bank of Russia estimates that the ruble weakening will quicken inflation movement to 4% without the risks of overpassing this level, unless the external environment changes considerably. Inflation is forecast to range between 3–4% as of the end of 2018 and hold close to 4% in 2019.

The Bank of Russia registers a rise in inflation risks triggered by some internal and external factors. First, geopolitical factors and accelerated yield growth in advanced economies may cause surges in volatility in financial markets and affect expectations for the exchange rate and inflation. Furthermore, uncertainty still persists over the dimensions of fiscal decisions, which are needed to estimate the impact of such decisions on inflation.

The Bank of Russia leaves unchanged its estimates of risks associated with consumer and oil price volatility, wage movements and possible changes in consumer behaviour.

In its key rate decision-making the Bank of Russia will be guided by assessments of inflation risks, inflation dynamics and economic developments against the forecast.