Page 44 - RusRPTJul20

in the rest of this year, although the majority of business see this year as being a lot worse than last year.
Two-thirds of Russia’s entrepreneurs see the outlook for the Russian economy as negative, according to a survey included in presidential Ombudsman for Business Boris Titov’ annual report,​ ​TASS​ reported.
The survey was conducted in February-March 2020 by the service of special communications and information of Russia’s Federal Guard Service. Owners of enterprises (56.7%), heads of enterprises (25%), deputy heads of enterprises (10.4%), and managers (7.9%) participated, all in all, 7,733 people.
“Two-thirds of respondents (68.3%) negatively estimate the state of the Russian economy,” the research said. Particularly, 52.2% of respondents described it as ‘problematic’, while 16.1% – as ‘disastrously recessionary’.
As many as 15.1% of respondents considered the Russian economy stable, whereas 3.5% referred to its state as ‘good’. The remaining 13.1% of participants were undecided.
The Markit poll is a good sign as it is forward looking and suggests that some optimism for a recovery in the rest of the year is returning.
Inflation has been another concern but here the news is a lot better. While inflationary pressures spiked following a circa 20% devaluation of the ruble during the worst of the crisis months, that effect has been off-set by the collapse in demand and the fall in retail sales turnover as a result of the lockdowns.
Russia's consumer price inflation (CPI) decelerated to 0.3% month on month in May 2020 from 0.8% seen in April, according to the latest data from Rosstat statistics agency. Annual inflation moderated to 3% in May from 3.1%, well below the Central Bank of Russia (CBR) target rate of 4%.
As reported by ​bne IntelliNews​,​ i​ nflation spiked in April​, but the price growth stopped in May allowing the CBR to​ ​star an aggressive monetary easing cycle that resulted in a 100bp rate cut in June to an all time low prime rate of 4.5%.
Markit’s respondents confirm that price pressures remain soft as bottlenecks in supply chains were loosened and supplier stocks were rebuilt.
“Supporting the softer overall contraction was a renewed expansion in production in June. Although only moderate, the rate of growth was the sharpest since April 2019 as factories reopened and firms returned to work. A number of firms stated that higher output was due to the processing of orders made before the pandemic escalated, while some highlighted increased client requests,” Markit said.
New orders rose only fractionally in June, but nonetheless signalled a marked turnaround from the substantial contraction seen in May. The upturn in client demand was linked to the reopening of customer businesses.
In contrast, new business from abroad continued to fall at the end of the second quarter, Markit reports. The downturn in new export orders was sharp overall despite the rate of decline having eased to the softest in three months.
44​ RUSSIA Country Report​ July 2020 ​ ​www.intellinews.com