Page 35 - RusRPTFeb22

In manufacturing, the figure exceeded the Bloomberg consensus estimate of 51.0, and we attribute this development to elevated budget spending in late-2021. Moreover, the print is in line with strong industrial production results in December. For more on manufacturing PMI, see our Daily Data Deck – Strong PMI reflects budgetary outlays, foreshadows healthy IP print of 2 February.
Services PMI marginally overshot the Bloomberg consensus of 49.5. Economic activity in services has been gradually picking up from November's low of 47.1, caused by COVID-19 lockdowns, and in January, business expectations started to look up. Still, inflationary pressures and weak external demand remain a concern.
While the PMI outlook is rosy, the CBR's news index printed -0.11pp in January vs +0.22pp in December. The divergence, albeit puzzling at first sight, can be explained. The news proxy dynamics are more negative, as it is more forward-looking than PMI, and hence presages a slowdown of economic growth. According to our estimates, GDP growth rates in 2022F are to halve from 2021 levels to approx. 2.2-2.4% y/y, converging to the long-run trend. (See our Economic Outlook – Part 2: Growth, COVID, Fiscal policy, of 19 January 2022, and Output & Demand – Investment and exports-led growth ahead, of 30 December 2021, for more insights into economic growth projections.)
35 RUSSIA Country Report February 2022 www.intellinews.com