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Download the PDF Russia Through a Lens | 2Q 2019 Russia through a lens Deloitte Research Centre / 15th issue /2Q 2019 Macroeconomic outlook Financial climate in Russia Consumption in Russia Overview of the Russian Key Russian macroeconomic CFO Survey of the Leading Consumer activity dynamics oilfield services market indicators in 2Q 2019 Companies in Russia amid falling real household Lower cost efficiency amid incomes favourable oil prices Page 04 Page 24 Page 33 Page 43 Содержание Russia through a lens Contents We are pleased to present the latest edition of Russia Through a Lens, the macroeconomic journal produced 04 24 by the Deloitte Research Centre in Moscow. Russia in figures Latest from Deloitte Established in December 2015, the journal is published Macroeconomic outlook Research Centre quarterly as part of the Research Centre’s monitoring (GDP, inflation, trade indicators, • Financial climate in Russia activities. currency rate, Central Bank • Consumption in Russia – 2019 In Russia Through a Lens, we focus on current key key rate, commodity price • Overview of the trends in the Russian economy and present our dynamics etc.) Russian oilfield services research in the following fields: market – 2019 • Russia in figures – statistical analysis • Research Centre market analysis • Top M&As If you have any questions or suggestions 56 57 regarding this research, please do not hesitate to contact us at: Top 5 M&A Global wind [email protected] Top news: Russia and Europe Top news: Russia and Asia 58 59 Useful stickers Contacts Designed by the Deloitte Design Group, Moscow 03 Russia through a lens | Russia in figures 04 Russia through a lens | Russia in figures Russia in figures 05 Russia through a lens | Russia in figures GDP GDP dynamics “It is obvious that the model of economic growth that could ensure the indicator [of GDP growth] is at the level 41, 277 26, 917 92, 101 86, 014 73, 134 79, 056 68, 164 38, 807 60, 283 33, 248 83, 094 83, 46, 309 112, 800 103, 876 106, 100 of 3% and above, has not yet been fully established. <...> In the first quarter [of 24.6 23.5 24.2 30.2 2019], there was minimum growth since 19.3 13.1 7.3 8.1 12.8 5.1 3.5 7.1 2.1 6.3 the end of 2017 at 0.5%. <...> The reasons -6.0 are clear. The main one is the weakness of final demand amid a simultaneous 8.2 8.5 5.2 4.5 4.3 3.7 1.8 0.7 0.3 1.6 2.3 0.8 1.9 -7.8 -2.3 tightening of fiscal and monetary policy. We had an increase in VAT together with deferred budget expenditures, and this coincided with the Central Bank of Russia hiking its key rate.” Maxim Oreshkin, Minister of Economic Development of the Russian Federation 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019* 2020* GDP, bln RUB GDP growth, % GDP volume indices, % (at current prices) According to the Russian Ministry of Economic Development, GDP grew 0.7 Source: Rosstat, (*forecast) Institute for Economic Forecasting of the Russian Academy of Sciences (IEF RAS) percent in January–May 2019. Source: “Economic Snapshot. June 2019”, an overview by the Russian Ministry of Economic Development Q2 GDP (at constant 2016 price), bln RUB The Russian Central Bank views the slowdown in GDP growth in the first quarter of 2019 as temporary and expects that in the second and third quarters 17, 719 21, 193 19, 374 21, 651 21, 251 20, 012 18, 451 21, 349 19, 246 20, 670 20, 767 20, 899 20, 600 the growth of the Russian economy will accelerate due to a more intensive implementation of national projects and government investment growth. Source: “Economy: facts, estimates, commentaries. May 2019” (analytical commentaries by the Russian Central Bank). 2011 2013 2017 2012 2015 2014 2018 2016 2010 2007 2009 2008 2006 Source: Rosstat 06 Russia through a lens | Russia in figures GDP forecasts Source 2019 2020 2021 Economist Intelligence Unit +1.2% +1.7% 1.7% Ministry of Economic Development +1.3% +2.0% +3.1% Central Bank of Russia +1.0% to +1.5% +1.8% to +2.3% +2.0% to +3.0% IEF RAS +0.8% +1.9% +2.1% Standard & Poor’s +1.5% +1.8% +1.8% Moody’s +1.7% - - Fitch +1.2% +1.9% +1.9% European Commission +1.5% +1.8% - World Bank +1.2% +1.8% +1.8% International Monetary Fund (IMF) +1.6% +1.7% +1.7% European Bank for Reconstruction and +1.5% +1.8% - Development (EBRD) Organisation for Economic Cooperation +1.4% +1.5% - and Development 07 Russia through a lens | Russia in figures Inflation Inflation rate, % “A slow-down in inflation has become a steady trend. 13.3 12.9 This was aided by Bank of 11.9 Russia’s key rate decisions, including the 11.4 preemptive hike in the second half of last year. Inflation peaked in March, reaching 5.3 percent. <…> The effect on inflation 8.8 from the VAT hike has exhausted. The ruble’s appreciation since the beginning 9.0 8.8 of the year has also contributed to 5.4 6.6 inflation slowdown.” 6.5 Elvira Nabiullina, 6.1 4.5 Governor of the Russian Central Bank 4.3 4.0 4.0 4.3 2.5 3.8 4.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019* 2020* 2021* Fact Central Bank of Russia Ministry of Economic (*forecast) Development (*forecast) Inflation rate forecasts Source 2019 2020 2021 Inflation in January-May 2019:2.42 percent Inflation in May 2019 versus May 2018: IMF 4.8% 4.2% 4.1% 5.1 percent Economist Intelligence Unit 4.7% 4.0% 4.3% Inflation target*:4.0 percent Fitch 4.5% 4.0% 4.0% Interfax poll (consensus) 4.5% - - Reuters 4.7% 4.0% - *The inflation target is set for the consumer price growth rate over the corresponding month of the previous year (Central Bank of Russia). 08 Russia through a lens | Russia in figures Trade structure Share of energy products in total exports, % Period: January-April 2019 (Period: January 2006 – April 2019) • Foreign trade turnover: USD 215.8 billion (+0.3% YoY) 73.0 74.5 73.4 72.4 70.8 72.7 • Trade balance: surplus of USD 66.0 billion 70.3 68.0 69.6 69.6 66.4 67.6 62.0 63.4 (+USD 1.1 billion YoY) 55.3 53.0 54.2 • Exports: USD 140.9 billion (+0.6% YoY) 47.0 Share of the CIS countries 12.1%, non-CIS 44.0 42.3 43.6 40.9 39.5 countries 87.9% 35.5 35.9 35.5 32.9 32.6 • Imports: USD 74.9 billion (-0.3% YoY) Share of the CIS countries 11.0%, non-CIS countries 89.0% 2011 2012 2013 2017 2015 2019 2016 2014 2018 2010 2007 2009 2008 2006 Jan-Apr Percentage in exports to non-CIS countries Percentage in exports to the CIS countries Source: Federal Customs Service Share of products in total eхports/imports to/from the CIS/non-CIS countries (Period: January 2006 – April 2019) To non-CIS To the CIS countries countries Eхports Energy products 69.6% 35.5% Metal products 9.2% 12.9% Chemical products 5.0% 13.2% Machinery and auto 3.4% 16.3% Food and agriculture products 4.6% 9.7% Timber, pulp and paper products 2.9% 4.3% From non-CIS From the CIS Imports countries countries Machinery and auto 48.9% 19.8% Chemical products 19.7% 15.2% Food and agriculture products 12.1% 22.9% Metal products 6.0% 16.6% Textiles and footwear 6.2% 7.7% Energy products 0.5% 4.2% 09 Russia through a lens | Russia in figures Exports (January–April 2019): Percentage In monetary In physical Categories of exports terms YoY terms YoY Energy products 65.5% 2.2% 6.4% 37.6% Electrical equipment 14.4% Coal 1.6% Crude oil -5.3% Natural gas -6.4% Oil products including: -6.3% Diesel fuel -10.2% Kerosene -13.9% Motor gasoline Metal products 9.7% -5.8% -4.6% 57.4% Aluminium 21.4% Ferroalloys 20.3% Copper and copper alloys -2.5% Semi-finished products of iron or non-alloy steel -13.0% Flat iron non-alloy steel -21.3% Cast iron Chemical products 6.0% 0.0% 0.0% 9.0% Organic chemistry 8.8% Pharmaceuticals 8.0% Paint 2.1% Rubber -1.7% Fertilizers -4.5% Abstergent -5.0% Plastics Machinery and auto 4.9% -12.8% n/a 30.7% Ground transportation. except railway -8.2% Electrical equipment -8.9% Mechanical equipment -25.4% Railway locomotives and rolling stock 29.9% Passenger cars 7.7% Trucks Food and agriculture 5.3% -0.5% -23.3% products 31.9% Sunflower 17.7% Meat 9.1% Fish 8.1% Cheese and curds Timber. pulp and paper 3.1% -1.3% 2.8% products 25.4% Paper 10.2% Lumber -0.2% Plywood -11.7% Rough wood 10 Russia through a lens | Russia in figures Imports (January–April 2019): Percentage In monetary In physical Categories of imports terms YoY terms YoY Energy products 0.9% -2.4% 5.0% 15.2% Crude oil and oil products 10.1% Coal Metal products 7.2% -2.0% -9.2% 26.2% Ferrous metal structures 16.5% Pipes -10.5% Ferrous metals -1.8% Flat rolled products of iron or non-alloy steel Chemical products 19.2% 1.2% 6.8% 17.6% Organic chemistry 8.4% Inorganic chemistry 7.1% Plastics 6.2% Rubber -4.8% Paints -28.8% Fertilizers Machinery and auto 45.7% -1.7% n/a -2.4% Electrical equipment -2.8% Optical instruments and apparatus -8.0% Mechanical Equipment 39.4% Trucks -3.9% Passengers cars Food and agriculture 13.3% -1.2% -3.0% products 93.7% Butter 14.9% Cheese and curds 10.3% Citrus -7.9% Fish -23.6% Milk and cream Textiles and footwear 6.3% 0.5% 3.3% 11 Russia through a lens | Russia in figures Currency rate EUR vs.
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