Global growth was sustained in the first quarter of 2018, but showed signs of moderation amid mixed incoming data in major economies.
Oil prices, which rose 1 percent in March, gained considerable ground in mid-April with Brent exceeding $72/bbl for the first time since 2014. Oil prices have been supported by robust global demand, concerns about supply outages due to potential conflicts in Syria and Saudi Arabia and further output reductions in Venezuela.
A stronger trade balance, which gained from higher value of commodity exports, anchored Russia’s current account in the first quarter of 2018.
In February 2018, industrial production growth slowed down on the back of lower growth in manufacturing. In March 2018, consumer inflation slightly accelerated.
Labor market indicators improved in February. In the first two months of 2018, aided by higher oil revenues and lower expenditures, the overall federal budget stance and general government budget surplus improved significantly—by 1.1 and 2.1 percent of GDP respectively—compared to the same period in 2017.
In February, the banking sector remained largely stable.
On April 6th, the U.S. imposed new sanctions on seven Russian oligarchs, their 12 companies, 17 senior Russian government officials, and a state-owned Russian weapons trading company and its subsidiary.
The fiscal impact of the April 6th sanctions remains to be seen as it will depend on the nature and magnitude of public support to affected firms.
Possible public intervention could increase the state footprint in the economy, further affecting competition and productivity.
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