Russia Monthly Economic Developments

Oil prices have been volatile in recent weeks, with Brent prices trading between US$65/bbl and US$76/bbl, as demandpositive news in the U.S. and Europe has been offset by concerns over the COVID-19 Delta variant and its impact on oil demand, especially in Asia.

Global economic activity firmed up further in July, as the global composite Purchasing Managers’ Index (PMI) came in at 55.7 (a slight decline from 56.6 in June). Services PMI outpaced its manufacturing counterpart, reaching 56.3, as large economies resumed reopening efforts.

Russia’s industrial production growth continued to moderate in July, having shown signs of deceleration since April. In July, core annual inflation continued to rise, reflecting mounting pressures from rebounding domestic demand, enduring supply bottlenecks, as well as higher global prices.

Even so, in August, the ruble appreciated by 0.5 percent against the US$, m/m, outperforming other emerging market currencies. The unemployment rate decreased by 0.2 percentage points to 4.7 percent (sa) in June. Banks’ key credit risk and performance indicators have remained largely stable, supported by the CBR’s policy response measures, including regulatory forbearance. Improving business confidence continued to stimulate demand for loansin July.

Household lending continued benefiting from the subsidized mortgage loan program launched by the government in April 2020. 


David Knight

Lead Economist for the Russian Federation

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