Russia Monthly Economic Developments

  • Global growth momentum continued in the first quarter of 2017, with global industrial production and goods trade growth rebounding from a pronounced weakness in the first half of 2016.
  • Financial markets and capital flows to emerging market and developing economies (EMDEs) have remained buoyant despite policy uncertainty and heightened geopolitical risks.
  • Oil prices gained ground thanks to the prospects that the OPEC/non-OPEC cuts will be extended in the scheduled OPEC meet on May 25th.
  • In April, higher oil prices and continued capital flows to EMDEs resulted in the ruble appreciating for the fifth consecutive month.
  • The Russian economy gained momentum in March, but the manufacturing PMI for April was surprisingly low. Inflation slowed further in April, almost reaching the end year target of 4 percent.
  • Noting this, as well as decelerating inflation expectations, the Bank of Russia cut the key rate by 0.5 p.p. to 9.25 percent. 
  • Key credit risk and performance indicators in the banking sector have been showing positive dynamics as the Russian economy gradually improves.
  • In the first three months of 2017, the federal government balance strengthened on the back of increasingly robust oil revenues; however, increased spending marginally widened the non-oil primary balance.


Apurva Sanghi

Lead Economist for the Russian Federation

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Marina Vasilieva
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