MA Russia Macro Monthly July 2019

SITREP. In this monthly, we present a situation report of Russia’s economic, political, business position as of mid‐year. Economic data shows weak growth. The leading growth indicator showed only 0.2% GDP growth in May. Some of this is a calendar effect, but growth for the first five months is running at 0.7% YoY.

MA Russia Macro Monthly June 2019

Pressure builds. The early June temperature in Moscow was hot and the RTS Index finally recovered all of the loss incurred since mid-2014. That’s the good news. The list of bad, or worrying, news items is considerably longer. This time last year the government kicked off twelve months of public discontent with the pension age reforms but promised all would be better by mid-2019. It is not. The question now is whether the economy can be revived, and start to calm public concerns, or whether people are finally losing patience? If the former, then all will be well. If the latter, then we can expect more pressure on government and on its economic policies.

Macro Advisory Demographics Update May 2019

Historical inheritance. Russia’s demographics suffer from the twin shocks of World War II and of the low birth rate in the 1990s. A mini baby boom in the 2000s helped a little but ended too soon.

Macro Advisory Monthly May 2019

Economy retreats. The leading indicator was at 0.6% for March, down from the February level of 1.4%, and back at the level for January. Other indicators like consumer spending and real wages are stagnant, which seems to be cancelling out any benefits from higher oil prices.

Russia Macro Monthly April 2019

Economy looks a bit better in February … The GDP leading indicator
was up 1.5%, a rebound from 0.7% in January. The manufacturing PMI
index was 52.8 in March, a surprise rebound from previous levels and
firmly in expansionary territory.

… leading to government optimism. First Deputy Prime Minister
Siluanov said that the economy performed much better than had been
expected in Q1. The Economy Ministry confirmed that if this positive
trend continues he will raise forecasts for this year and next in August.

Mueller exonerates Trump but not Russia. The report that Trump had
not criminally colluded with Russia in the 2016 election might help
Trump politically, but it is likely to renew the focus on Russia as a proxy
for Trump in US politics. Both the DETER and the DASKA acts are being
re-circulated in Congress. Secretary Pompeo informed Moscow that
CBW sanctions would be imposed in the near future. We think these
will not be highly damaging, but it depends on US politics.

Beltway 360 – Russia Sanctions in Congress

Economy looks a bit better in February … The GDP leading indicator was up 1.5%, a rebound from 0.7% in January. The manufacturing PMI index was 52.8 in March, a surprise rebound from previous levels and firmly in expansionary territory.

… leading to government optimism. First Deputy Prime Minister Siluanov said that the economy performed much better than had been expected in Q1. The Economy Ministry confirmed that if this positive trend continues he will raise forecasts for this year and next in August.

Russia Macro Monthly February 2019

A tough 1H in store. The mood in Russia is poor. Confidence indicators are weak for both consumers and companies and economic indicators are falling. GDP growth in 1H will be close to 1.0%, at best. Revised forecasts and scenarios. In this report, we revise some macro forecasts for 2019-21 and set out the different scenarios that may result in a worse or better result in the review period.

Sanctions Update October 2018

Damaging escalation. Since early August there have been a number of potentially damaging US sanctions put in place against Russia and the threat level of much more damaging actions is very high.

Danger period now to end-November. Between now and end November new sanctions legislation is expected to be introduced to Congress and President Trump will decide on phase 2 of the CBW sanctions. How damaging these actions, and enforcement, will be may depend on whether there are fresh accusations of election meddling against Russia during the US mid-term elections (6 November).