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Macro Monthly November 2018
Sanctions reprieve, not a pardon. It is now most unlikely that Russia
will face any major new sanctions from the US before year-end.
Congress has more pressing priorities and the absence of any election
interference allegations reduces the urgency. But key senators have
made clear that there will be new legislation introduced in 2019 and
they will press for more oligarchs and Russian enterprises to be
added to the SDN list.
Retail e-commerce in Russia February 2019
E-commerce strong growth continues. Retail e-commerce sales in
Russia grew by 20% in 2017 and by 19% to nearly US$18 billion in
Market is still underdeveloped. The Russian e-commerce market
still lags: in 2018, 12% of retail sales globally were made online
(China: 16%, UK 14.5%, Germany 8.4%), compared with just 3% in
So, scope for growth? Growth rates over the next five years are
forecast to be in the high teens, percentage wise, per annum, with
15% growth being the consensus figure for 2019.
Russia Macro Monthly February 2019
A tough 1H in store. The mood in Russia is poor. Confidence indicators are weak for both consumers and companies and economic indicators are falling. GDP growth in 1H will be close to 1.0%, at best.
Revised forecasts and scenarios. In this report, we revise some macro forecasts for 2019-21 and set out the different scenarios that may result in a worse or better result in the review period.
Russia Macro Monthly December 2018
Optimistic EconMin. The Economy Ministry added more detail to its
optimistic view of the economy in the 2025 to 2036 period. It expects
average GDP growth of 3.0% in the period. But, realistically, this is
unlikely without major reforms. So far, these are stalled.
Economy a little less gloomy. The leading indicator of economic
activity showed growth of 2.5% in October, a strong improvement on
previous months. The PMI manufacturing index also jumped sharply,
so the softness of August and September may be temporary.
Technology Series – Central Asia: Middle Earth is switching on
This is the fourth in a series of introductions to Smart City programs which have been launched, or which are planned, across the CIS-Eurasia region. Other reports in the series look separately at programs in Belarus, Ukraine, the Caucasus and Russia. These reports aim only to provide an overview of existing smart city and technology projects and of current and future State plans for developing “e-” and technology projects in each of the countries across the region.
Macro Monthly October 2018: Is Russia in the eye of a storm or preparing for a new growth phase?
Waiting for sanctions updates. There is a sense of being in the eye of the storm with regard to sanctions. After the frenzy in August and early September, the situation is now calm. But activity will pick up in November, in the aftermath of the mid-term elections and ahead of the Phase II CBW sanctions decision. We update the current position and highlight some conflicting indicators in this report.
Ukraine: Hampered by politics and funding
Good planning, poor implementation. Ukraine’s major cities have been planning Smart City projects for many years. But actual progress is slow because of a lack of financial resources and also slow administrative reforms.
Horizon 2020. The major technology improvement program, focusing on the government, and transparency and efficiency in state systems, is an EU-backed US$80 bln program.
Russia Macro Monthly September 2018
2019 downgrades … Both the Economy Ministry and the Central Bank have cut their GDP forecasts and raised inflation expectations for 2019. But both see the dip as temporary and expect a much better performance from 2020.
… but 2018 growth picture looks marginally better. Both PMI indicators rebounded in August, as did the government’s index of leading indicators for GDP. 2Q18 GDP was reported at 1.9%.
Technology in Belarus
Smart City spending less than planned. Belarus announced plans for an ambitious Smart City program almost five years ago but has implemented very few projects since since.
US$10 bln available for technology projects. There are, however, several major initiatives underway, some funded by World Bank and EU agencies, aimed at improving telecom services, renewable energies, transportation links and the environment.
Russia Macro Update: Catching a falling knife – August 2018
Losing momentum. The Q2 GDP growth indicator was weaker than expected and is consistent with other indicators that show slowing momentum. But we still see no reason to adjust our 1.7% growth forecast for this year. Another sanctions surprise. The latest US sanctions took everybody by surprise and have contributed to further ruble weakness. The risk of additional sanctions, especially the dangerous DESKAA bill now looking for support in Congress, is very high. There is no danger of a financial crisis or a drop in expected growth but the real impact is the drop in investment and FDI (less than US$2 bln in Q2 from over US$12 bln in 2Q17). This badly hurts future growth prospects.
Sanctions: Winter comes early to Moscow
New sanctions announced. The United States has accused Russia of using chemical weapons in connection with the UK poisonings and will add additional sanctions on 22 August. These measures are relatively modest in terms of impact but leave open the possibility of more serious measures being imposed after a further 90 days. Congress is preparing even more draconian measures. The latest sanctions come at a time when several new sanctions bills, aimed at restricting investment and trade with Russia, have been introduced to Congress. The most dangerous bill, the so-called DESKAA bill, which has broad bi-partisan support, would restrict investment into Russian sovereign debt and make it almost impossible for US entities to work with Russian energy companies in international projects.
Smart Tech in the Caucasus
This is the first in a series of introductions to Smart City programs, which have been launched, or which are planned, across the CIS-Eurasia region. Other reports in the series will look separately at programs in Belarus, Ukraine, and Russia, and also across the Central Asia region. These reports aim only to provide an overview of existing smart city and technology projects and of current and future State plans for developing “e-” and technology projects in each of the countries across the region.