Page 28 - RusRPTMay19

around 2% y/y, if the OPEC+ deal remains in place, but whether it does is currently the subject of deliberations, notes Minister of Finance Anton Siluanov.
In manufacturing, after an uptick in February to +4.6% y/y, the growth rates fell back to just +0.3% y/y in March. A review of the detailed data available at this point suggests that a significant part of the deceleration might be due to the lower output of petrochemicals.
In particular, the output of gasoline slowed from +7.2% y/y in February to +1.8% y/y in March, while the diesel fuel output reversed its sign, from +5.7% y/y expansion to a -1.5% y/y decline. Primary oil refining also contracted - 3.2% y/y in March.
Passenger car manufacturing has seen slower growth, too: +2.2% y/y vs. +7.4% y/y a month earlier.
The decline in electricity output is roughly in line with March being warmer than a year ago.
4.2 Inflation
CPI inflation was running at 5.3% in March, but is lower than expected as the effects of the 2pp VAT tax rate hike were milder than expected.
The Russian consumer price inflation index will reach the central bank’s target of 4% quarterly by July, Central Bank Chairwoman Elvira Nabiullina told President Vladimir Putin on March 4. “We assume that quarterly inflation will meet 4% by the middle of the year. The statistic effect of high prices will persist but in general, it will reach the trajectory of 4% by the middle of the year and we hope, we expect and pursue such policies that it would be close to 4% next year,” Nabiullina said.
28 RUSSIA Country Report May 2019 www.intellinews.com