Browsing documents with the theme of Russia
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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.
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.
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%.
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.
Russia Macro Monthly: Pension Reform and its Discontents – July 2018
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? – April 2018
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.
Waiting for a response. A Duma committee is debating retaliation measures, which it wants the President to act on. But comments from Administration officials suggest a much more cautious approach and a wish to avoid any actions which would hurt the economy.
Russian e-Commerce: Robust Growth Continues
Russia: Large market and fast growth. Total e-commerce sales volumes in 2017 exceeded RUB1,100 billion (US$18.5 bln), up from only RUB200 million in 2010.
But a lot of room for further growth. In 2017, e-commerce sales were approximately 3.9% of total retail sales, compared with 12-14% in markets such as the UK and Germany.
Russia’s bank sector consolidation continues … creating opportunities
The Central Bank of Russia continues to cull bad banks. The recent nationalization of 3 large private banks seems to mark the beginning of the end of this process. The sector will remain tightly regulated and the remaining private banks should not be allowed to get themselves into the same bad situation. Investors should do careful due diligence on partner banks in the region, and any decision by local staff not to use a state bank or foreign-owned bank should be carefully reviewed.