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The Regions This Week
August 25, 2017 www.intellinews.com I Page 7
Eastern Europe
Russian President Vladimir Putin met with his Armenian counterpart Serzh Sargsyan in the Black Sea resort of Sochi. The two leaders spoke about the Armenian-Azerbaijani conflict over Na- gorno-Karabakh behind closed doors. Putin also met with Azerbaijani President Ilham Aliyev in Sochi separately at the end of July.
Ukraine's industrial production plunged 2.6% y/y in July after two consecutive months of growth. In the January-July period, output de- creased by 0.7% y/y. Industrial production in July from June in m/m terms grew by 0.3%, while the seasonally adjusted decline was 1.3% m/m.
Russia’s spike in fruit & veg prices that soared following terrible weather in May appears over as the headline inflation rate fell to a new post- Soviet low of 3.7%, clearing the way for more rate cuts by the central bank in September.
The Russian government approved a draft agreement on the allocation of a new $700mn loan to Belarus, which will be denominated in Russian rubles. The loan will be used to refinance Belarus’ debts on previous Russian government loans.
A new private equity fund called “Target Global Fintech Opportunities” will invest in financial technology startups operating in Russia, those located abroad with Russian founders, or foreign ones with plans to enter the Russian market. The fund is backed by Sergey Solonin, the co-founder of payment service provider Qiwi.
Russian International Bank (RMB), one of Rus- sia's top-200 largest lenders, announced it is ceasing a number of operations due to liquidity problems.
The measure of Russia's political risk is cur- rently at a four-year low, less than a month after the US launched a new round of sanctions against Moscow. The cost of insuring Russian debt
against default for five years using credit-default swaps declined to 145.6bp on August 24, the low- est level since the 2014 annexation of the Crimean peninsula.
Iconic Russian aircraft makers Sukhoi and MiG will be merged into a single military aviation unit under the umbrella of the United Aircraft Corporation (UAC) by 2019.
Russia’s media market grew by 14% y/y in the first half of the year, according to the Associa- tion of Russian Advertisers. TV ads was the fast- est growing segment as real incomes start rising again and retail turnover recovers. Online sales were also still strong, up 23% y/y.
Russia is expected to maintain its title as the largest exporter of grain in the world and could break its all-time harvest record this year. The Moscow-based consultant ProZerno expects Rus- sia to harvest of 130.7mn tonnes of grain this year, up from the 119mn tones last year and signifi- cantly more than the official forecast of 103mn tonnes by the agricultural ministry.
The number of Russians collecting "under the table" salaries has reached 33mn people, which roughly corresponds to the number of those officially employed, concluded a study by the Russian Presidential Academy of National Economy and Public Administration. According to the study, over the past 12 months, the proportion of people employed unofficially has grown from 40.3% to 44.8%.
Russia's largest lender, the state-controlled Sberbank, revised a number of target indica- tors for 2017 upwards. The bank expects return on capital at about 20% this year (up from 16-19% previously) and capital sufficiency ratio of at least 10.5% (up from 10%). The revision follow strong results published for the second quarter and beat- ing analysts expectations.