Page 30 - RusRPTJul19

51.5 in May from 53.0 in April, as economic activity in both manufacturing and services was softer than in previous months and the rate of growth was the slowest since May 2016.
As bne IntelliNews has argued recently, Russia’s economy is stagnating, as the Kremlin battles to put in place reforms that will improve the business environment, but is bettering heavily that a massive RUB27 six-year spending programme on the National Projects will be enough to kick start growth – although even this effective is not expected to kick in until 2021.
The most interesting aspect of this months report is that while domestic demand is lacklustre, Russian service providers are actely building up exports and the growing demand from abroad to some extent offset the poor results at home.
“Although the overall expansion in new business eased to an 11-month low, foreign client demand rose strongly. The latest data extended the current sequence of expansion in export sales to eight months, with anecdotal evidence highlighting greater access to new markets,” Markit said.
Access to new markets to compensate for soft markets at home perhaps contributed to the optimistic outlook most managers on Markit’s panel have for the rest of the year.
“Service sector firms registered a robust degree of confidence in May. The level of optimism was above the series trend. Panellists attributed positive sentiment to new client acquisitions, greater advertising and investment in new technology,” said Markit.
As reported by bne IntelliNews, Russia's GDP growth in the first quarter of 2019 disappointed, following rather moderate results from first-quarter base sector statistics. It has analysts hoping for a fiscal spending stimulus later in 2019 to support output.
30 RUSSIA Country Report July 2019 www.intellinews.com