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BRIEF

Russia's Monthly Economic Developments

December 10, 2014

Highlights

  • The World Bank revised its 2014 growth projection for Russia up from 0.5 percent to 0.7 percent.
  • Sliding oil prices led to a fresh round of sharp Ruble depreciation.
  • The Ruble weakness and the food import ban continued pushing up consumer prices in November, making a further significant policy rate hike by CBR on December 11 likely.
  • But the weaker Ruble appears to have supported industrial activity, which reported robust growth in October, yet we expect the positive lift from import substitution to be short-lived as consumer demand is fading.
  • Russia’s financial sector outlook deteriorated as the depositors’ base continues to erode and refinancing risks increase.
  • The government continued using the National Welfare Fund to enhance the stability of the financial system.