Page 31 - RusRPTDec19

for CBR could be limited – we expect the CBR in 2020 to cut its benchmark rate only by 25bp to 6.25%,” ​BCS Global Markets​ said in a note.
4.2.2​ PPI dynamics
4.3​ Industrial sectors and trade 4.3.1​ Producers PMI
Russia’s IHS Markit Russia Manufacturing Purchasing Managers’ Index tumbled to 45.6 in November,​ down from 47.2 in October – the worst performance across the Russian manufacturing sector for over a decade.
The strong deterioration in the health of the manufacturing sector has now entered its seventh month in a row.
“Russian manufacturing firms indicated a sharper deterioration in operating conditions in November, with the headline PMI figure dropping to the lowest since May 2009,” IHS Markit said in a note. “The overall contraction was driven by weaker demand conditions, with production and new orders falling at steeper rates. In turn, goods producers reduced their workforce numbers further and output expectations slumped to the weakest for two years.”
The manufacturing PMI has followed the fall in industrial production which was down from 3% in August and September to 2.8% in October and is likely to fall further when the November figure is released.
The fall in manufacturing also follows the deteriorating business confidence indicators, which has slipped to -5 Index Points in November from -3 Index Points in October of 2019. Business confidence has been slipping in recent months, but this partly due to a seasonal trend where confidence always declines as winter sets in.
Markit’s respondents also reported a fall in confidence over the coming year in November. The level of optimism was the weakest for two years, with the reduction in positive sentiment generally attributed to challenging demand
31​ RUSSIA Country Report​ December 2019 ​ ​www.intellinews.com