Page 58 - RusRPTSept19

As reported by bne IntelliNews, Russia's economic growth is expected to pick up in 2H19 together with the government spending on the 12 national projects, which so far has been off to a slow start.
"Although the monthly spending data is fairly volatile and is subject to revision in the future, it nevertheless indicated a significant acceleration compared with previous periods," Sberbank CIB commented on August 16.
In July the government increased spending on some national projects (such as transportation and federal road projects), spending RUB84bn on roads in July alone, compared with RUB207bn for the whole of 1H19.
"However, it is still running considerably behind its annual targets, as it spent only 36% of annual target on transport and 34% on roads in 7m19," Sberbank notes, expecting the spending to be ratcheted up through the year-end as the government will likely endeavour to catch up with its targets.
Commenting on July's underperforming industrial output, Vladimir Tikhomirov of BCS Global Markets warned that the 2H19 expected rebound may end up being less pronounced, as "consumers remain under pressure and the state continues to take a slow approach to investments in national projects."
In January-June 2019 overall budget revenues were up 9.3% y/y at RUB11.5 trillion (57% of the annual plan), while expenditures grew just 5% to RUB9.6 trillion (52% of the annual plan). The budget surplus for 7M19 reached RUB1.9 trillion, close to the government's target for the full year of 1.7% of GDP. Sberbank CIB expect a surplus of around 1.8% of GDP in 2019.
58 RUSSIA Country Report September 2019 www.intellinews.com