Browsing documents in Macro Monthly
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Russia Macro Monthly: Pension Reform and its Discontents
Russia hosts good World Cup. Despite our headline in the June Monthly, Russia’s football team exceeded all expectations. The hosting of the event also confounded critics. However, optimism that this may lead to reform acceleration or, e.g. a much easier tourist regime, and thus boost tourism, is unfounded at this stage.
Pensions reform backlash. Opinion polls show a large majority of Russians are unhappy with the proposal to raise the retirement age. Putin is likely to wait until the extent of public feeling can better be gauged in the autumn before making a final decision. He has never pushed a genuinely unpopular reform because of the instability risk.
Russia Macro Monthly June 2018: Will the new government team fare better than the nation’s footballers?
New government, new challenges. Prime Minister Medvedev unveiled a government with a few new faces, and a plan to deploy RUB8 trillion (US$129 ln) on national projects on health, education construction, and the digital economy.
Kudrin given oversight role. Alexei Kudrin will head the Audit Chamber. Kudrin has regularly stated that he would never take a non-job in government so it is expected that he will make the Audit Chamber a more vocal agency and have a greater role in budget spending oversight.
Macro-Advisory May 2018 Monthly – Now for The Hard(er) Part
New-old government. As expected, Prime Minister Medvedev is to remain in his job. There are some significant changes amongst deputy PMs, indicating a need for a new approach, which may be interpreted as signaling more spending on health, education and infrastructure.
Need to focus on the economy. Polls show that while people strongly support the president they are increasingly critical of the economic performance. It is clear that if Putin wants to retain public support during this next term, he will need to focus more on the economy.
Macro Monthly – What Difference Do April Sanctions Make?
Sanctions game-changer. The 6 April US sanctions were something of a game-changer as they targeted some oligarchs and their businesses. Investors and businesses are likely to adopt a more cautious approach to Russia for some time until the risk level is better understood.
Russia Macro Monthly: Can continuity lead to change?
In lieu of a concrete election program, the President made a late annual state-of-the-nation speech that laid out a liberal economic vision and tough foreign policy. The latter appears to be more electoral posturing than a major change in nuclear doctrine. We set out the main economic points and those with implication for business opportunities, in this monthly.
Will 2018 prove to be a turning point?
2017 growth at 1.5%. Rosstat estimates last year’s GDP growth at 1.5%. A weakening industrial production trend was offset by stronger growth in agriculture and a recovery in retail sales. VEB estimates Q4 growth at 0.6%, down from +1.8% in Q3 and 2.5% in Q2.
Will politics, disruptions and the dollar continue to drive oil?
OPEC-Russia deal created a favorable backdrop … The price of Brent fell 16% in the first half of 2017 but rallied 40% through the second half. The continuation of the OPEC-Russia deal plus steadily rising demand, created a favorable backdrop but it was the combination of several other factors which created the price catalyst.
Russia’s Capital Markets in 2018: Riders on the Storm
Well positioned. Russian assets are well positioned to outperform global peers in 2018. For equities whether that means strong price appreciation or another year of flat performance will be determined by the trend in global markets. Russian equity indices will hardly rise against a decline in global markets but should outperform a global rising trend.
Macro-Advisory 2018 Political Outlook
Outlook for 2018. There is no reasonable basis to assume there will be any major changes in Russian politics in 2018. We think there is at best a 25% chance that Putin will use his new mandate to implement the major reforms that Russia needs to move to a better economic growth path. More likely he will choose stability because it is lower risk. Speculation will then move to what happens in 2024. Who will Putin choose to succeed him, will that choice be challenged, and what role will Putin have thereafter?
Russia & CIS Relevant Books 2017: Recommended Reading List
Most useful & interesting books in 2017. The first section of this report lists the most useful (for investors and business managers) books about Russia, the CIS and Central Asia which have been published in 2017 and which offer some insight into either the economy and politics or simply how Russia works. Specifically excluded from this list are most of the “tabloid” books focusing on, e.g. the impending doom of war or simply ranting about why Russia/the CIS is either so bad or so wonderful. We mention just a few which, e.g. attracted media attention.
Russia Macro-Politics December Monthly: Tempered holiday mood
Investors and government are waiting for sanctions. The CAATS act requires that the US government must draw up a list of “Putin’s inner circle” to be sanctioned and to report on the viability of bans on purchases of Russian debt by the end of January 2018. Capital markets are largely flat with low volumes as investors wait to see what happens next in Q1 or 1H18. Russian indices are set to underperform global peers by approximately 30% this year.
Macro-Advisory Macro Monthly: November 2017-The calm before the … what?
Economic advance continues. The economic recovery continues to strengthen and expand, albeit modestly. September GDP rose 2.4% YoY, bringing the growth for 9M17 to 1.8% YoY. The agriculture sector is a big driver, recording 8.5% growth in September (+4.7% YoY in 9M). There is also a stronger-than-expected recovery in retail sales.
Modest upgrades. Several agencies, such as the World Bank, IMF and Fitch, have modestly upgraded their forecasts for 2017-19. The Economy Ministry is the most bullish but still quite modest, with expected growth rising to 2.3% YoY in 2020.