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unemployment and inflation rises, have taken the wind out of the services sector, which has been one of the main victims of this year’s coronacrisis.
The services result comes two days after Markit released slightly better manufacturing PMI results. The headline seasonally adjusted IHS Markit Russia Manufacturing PMI for December was up at 49.7 in December from 46.3 in November.
Taken together, the IHS Markit Composite PMI Output Index improved slightly to 48.3 in December from 47.8 in November, but is still almost two points below the 50 no-change mark. In the upside-down world of 2020, manufacturing output has been doing better than services, which is a reflection of the underdeveloped nature of Russia’s economy, where manufacturing is still more important than services, the opposite of the more developed nations in Western Europe.
Outlook for 2021 remains uncertain
The prospects for 2021 are better, but much will depend on how the pandemic develops. On the one hand Russia was the first country in the world to start rolling out mass inoculations using the Sputnik V vaccine. The effort to produce enough vaccine to inoculate the entire 148mn strong population has been so big that industrial production got a boost in November, with the contraction posting a mild -2.6%, following the -5.5% contraction a month earlier, due to the ramp-up in the pharmaceutical sector.
With half a dozen vaccines being rolled out in the first quarter there is a chance for a snapback in 2021 as a year’s worth of pent-up demand is released.
On the other hand, the new more infectious variant of the coronavirus (COVID-19) means infection rates could continue to rise rapidly in the first half of 2021. Russia’s public health system was already close to breaking point in December, with 16 regions running at 90% of bed capacity or more.
The coronavirus situation in Russia is continuing to deteriorate, Deputy Prime Minister Tatiana Golikova told a meeting on December 30 of senior government officials and President Vladimir Putin. She admitted that the real number of infections in Russia was probably “three times higher” than the official numbers.
New data from the country's statistics agency, Rosstat, shows that during the first 11 months of 2020 there was an increase of more than 229,700 more deaths in Russia than during the same period in 2019. Golikova, who is in charge of the country's coronavirus response, said that "more than 81% of this increase in mortality over this period is due to COVID." That means 186,000 Russians died from coronavirus in these months, more than three times more
56 RUSSIA Country Report January 2021 www.intellinews.com
