The Lastest Macroeconomic News
14.05.2023 17:12 Annual inflation rate in Russia fell to 2.3% in April
Against the background of the underlying effect of rising consumer prices last spring, annual inflation in the Russian Federation fell to 2.3% in April, which is significantly below the Bank of Russia`s target of 4.0%. Such data were published by Rosstat on May 13. A little over a year ago, in February 2022, inflation accelerated sharply to 20% against the backdrop of Western sanctions. Since then, it has been gradually declining to current levels. The April inflation rate was more than one and a half times lower than in March - 3.5% and turned out to be more than four times lower than the value at the beginning of the year - 10%. At the same time, according to Rosstat, and earlier on the same topic, statements by the Central Bank of the Russian Federation were made, inflationary pressure in the economy remains against the background of the weakening ruble and the budget deficit, and in the coming months the figure is likely to grow. As a result, the regulator kept the key rate at 7.5%, even allowing it to be increased in the future if necessary.
26.04.2023 14:34 CentroCredit Bank`s credit rating has been affirmed at `ruBB`
Credit rating is very important for any bank. It is a benchmark for counterparties, as well as for customers, shows how much the bank can be trusted, including in difficult economic conditions. The higher the rating, the more stable the credit institution is. The rating characterizes the work of the bank`s management, and a worthy indicator indicates that it is possible and necessary to cooperate with the bank. In this vein, Centrocredit Bank is quite successfully coping with its tasks. As Andrey Tarasov, Chairman of the Board of Directors of CentroCredit Bank, told our correspondent, the bank`s credit rating regularly calculated by the Expert RA rating agency was affirmed at ruBB with a stable outlook. The indicator was achieved in the context of a difficult economic situation in the last year, against the backdrop of volatility in exchange rates and a decline in a number of sectors of the domestic economy. The management of the credit institution as a whole evaluates the preservation of the rating as a success, however, in the future it will strive to improve performance and further progressive development of the credit institution.
23.04.2023 16:17 ING analysts predict big shifts and weak growth in global trade in 2023
Since the end of 2022, global trade has shown clear signs of weakening amid declining demand, analysts at ING said. World trade has fallen by more than 5% since September. Looking at where demand has weakened the most, it is interesting to note that the fall in imports was fairly evenly distributed across the major economic blocs. Thus, this is not a story of falling gas imports to Europe, but rather a reflection of weaker commodities-related economic activity. Overall, analysts expect total trade to grow by just 1% year-over-year, with a 2% increase in trade in 2024. This means that trade should fall below the rate of global GDP growth and continue to grow slowly compared to long-term averages. World trade is still experiencing the effects of two major shocks in recent years. The extreme times of the pandemic have caused a lot of problems with supply curtailment and demand overheating. Currently, these problems seem to be quickly resolved, and supply chain problems on the same scale as in recent years are not expected.
14.04.2023 14:33 According to the IMF forecast, Russia`s GDP will grow by 0.7% in 2023 and by 1.3% in 2024
The IMF has adjusted upward its estimate of Russia`s GDP growth in 2023, according to a fund report dated April 12. The organization now estimates that the Russian economy will expand by 0.7% in 2023, up 0.4% from the previous forecast for the current year. In 2024, the economic growth rate in the Russian Federation will accelerate and reach 1.3%, which, however, is lower than the fund predicted earlier - 2.1%, because sanctions will continue to have a negative impact. Inflation in the Russian Federation in 2023, according to the IMF, averaged 13.8%. Analysts expect the figure to fall to below 4% - the target for the CBR - due to the low base, but in the second half of the year the figure will rise again. The fund estimates inflation at 7% in 2023 and a decline to 4.6% next year.
06.04.2023 20:43 Business activity in the Russian service sector increased significantly in March
In March, Russia`s services sector saw its biggest increase in business activity in two years. Output growth accelerated to its sharpest level since August 2020 as demand growth was supported by stronger demand conditions. The seasonally adjusted S&P Global Russia Services PMI stood at 58.1 in March, up from 53.1 a month earlier. Any result above 50 without change is an extension. The expansion of the capacity of service providers in the Russian Federation was facilitated by the resumption of the increase in work in progress. Although their level increased only slightly, the increase was recorded for the first time in 8 months.
05.04.2023 19:36 PMI index for the manufacturing sector in Russia showed strong growth
In March, companies in the manufacturing sector of Russia noted a significant increase. The PMI index calculated by S&P Global Russia for the manufacturing industry increased to 53.6 points compared to 53.2 points a month earlier. The data indicated a continued improvement in the state of Russian industry. A faster increase in industrial orders was the main reason for the growth of the index, the report says. The output of goods from Russian manufacturers steadily increased at the end of the first quarter, and the growth rate in March was at a maximum for 3 months. The recovery of the sector was helped by the influx of new orders and growth in customer demand. The volume of new sales from Russian manufacturers also continued to increase last month. Among the factors that had a positive impact on growth, experts noted a decrease in competition, import substitution and customer recommendations. At the same time, growth was driven and limited by the domestic market, as the decline in orders from foreign customers continued in March as a result of sanctions.
28.03.2023 14:35 Retail revenue in Russia may increase in 2023
In 2022, the economic downturn in Russia, as a result of Western sanctions, led to an increase in the volume of trade in essential goods and products. At the same time, retail sales declined overall. Sales of non-food items were particularly hard hit. Some sectors experienced significant declines, while others were less affected. This, however, did not greatly affect the marginality of the business, analysts say. Rosstat reported that in 2022, the decline in retail sales was 6.7% year-on-year. The figure was lower than during the coronavirus pandemic, including the lockdown in the spring of 2020. Analysts at Bloomberg Economics note that retail sales have struggled to recover after falling back in 2014. The sector was also one of the hardest hit during the reporting period. Currently, retail sales account for up to half of Russia`s GDP, and the state of retail is very important for the country`s economy as a whole. Consumer sentiment is critical to growth. Meanwhile, in recent years, against the backdrop of economic uncertainty, people are increasingly trying to save and spend their money only on the bare necessities. As a result, retail sales have declined, a trend analysts predict will continue into the first half of 2023. In the second half of the year, as it is predicted, as the situation in the Russian economy stabilizes, supplies are established and inflation decreases, the non-food sector will begin to recover, which will positively affect retail sales in general.
25.03.2023 20:25 The Ministry of Economic Development of Russia raised the forecast for economic growth in 2023
The Russian Ministry of Economic Development raised its economic growth forecast for 2023 from a fall of 0.8% to some slight growth in the range of 0.1% to 0.2%, Minister Maxim Reshetnikov said March 24. "We confirm that our expectations for this year are positive, we expect significant growth, based on indicators related to economic development, investment, improved forecasts for household incomes," the minister said. The Central Bank of Russia (CBR) also raised its forecast for 2023 last month from a reduction forecast to a more optimistic range of -1% to +1%. Earlier, the International Monetary Fund (IMF) also last month raised its 2023 forecast from a contraction to a statement that Russia`s economy will grow 0.3% in 2023 as it expects oil exports to remain largely unaffected by sanctions. The Russian economy weathered the sanctions much better than expected, analysts say, as it successfully redirected much of its trade from the West to the East.
23.03.2023 12:42 2022 was a record year for the construction industry in Russia
In 2022, one of the successful stories in Russia was the residential real estate sector. This is the sector of the economy that stimulates the development of many related industries and has the largest multiplier effect. Because the sector is highly localized, it is far less dependent on external markets than many other industries. This applies to the supply of both equipment and materials, components and semi-finished products. According to experts, the construction sector in Russia may well be focused on domestic production. Import substitution issues remain in terms of electrical equipment, tools and construction equipment, as well as paints and varnishes and some other components. However, in general, the construction industry in the Russian Federation is in good condition. The last year was a record year for the construction sector in absolute terms. Across the country, 102.6 million square meters were put into operation, including both multi-apartment and private houses. The indicator increased immediately by 11% compared to 2021. It turned out to be 27% higher than the average value for 2015-2020, twice as much as in 2005-2007 and three times exceeded the rate of the beginning of the 2000s. The effect was achieved mainly due to the rapid growth in the first half of the year.
19.03.2023 14:02 The Central Bank of the Russian Federation left the key rate and forecasts unchanged
The Council of the Central Bank of the Russian Federation at its regular meeting on monetary policy, held on March 17, decided not to change the key interest rate, leaving it at 7.5%. The bank retained tough language, but abandoned tougher action. Experts expected such a decision from the regulator. Prior to this, in February, the Bank of Russia also did not change the rate, leaving it unchanged for the fourth time in a row. Then the regulator did not give in to pressure from the Kremlin and did not begin to soften the policy in order to accelerate economic growth. Instead, the Central Bank of the Russian Federation issued a significantly tougher forecast for Russia`s economic prospects this year and warned of an increase in the budget deficit. In March, the bank repeated the same wording. The Central Bank of the Russian Federation reported that over the past month, inflationary risks have not changed significantly. At the same time, the bank maintained its previous forecast for consumer price growth in 2023 at the level of 5-7%, and in 2024 - about 4%. It was again stated that if the risks of inflation increase, the bank will consider the issue of increasing the interest rate.