Page 40 - bne IntelliNews Country Report: Russia Dec17

increased demand at suppliers," the report reads.
Notably, business confidence among service providers remained robust in October, also attributed to greater client demand. The manufacturers, on the other hand, showed a lower level of optimism than in September.
“IHS Markit currently forecasts modest GDP growth of 1.8% year-on-year in 2017, supported by recoveries in demand conditions in both the manufacturing and service sectors,” according to the report, the outlook being below the reaching the ambitious goal of over 2% short-term GDP growth set by the government .
4.3.2 Corporate profits dynamics
Share of companies intending to invest in business decreasing.
According to the October Gaidar survey, 25% of companies wanted to decrease their investments (vs. 21% of companies in favor of investment), the highest share since the beginning of the year. In the September survey, only 22% of companies planned to decrease their investments (vs. 26% intending to increase their investments).
The significant share of companies which planned to invest at the beginning of the year coincided with a high investment growth rate in 1H17 (4.8% y/y for 1H17 – 2.3% y/y in 1Q17, rising to 6.3% y/y in 2Q17), which analysts attribute to an acceleration in SME investments due to the introduction of new retail trade regulations.
Analysts do not expect investment growth to remain as strong in 2H17, a view now confirmed by the business sentiment survey. Alfa Bank targets only 3% investment growth for 2017.
40 RUSSIA Country Report December 2017 www.intellinews.com