Page 39 - RusRPTApr21

see GDP growing 2.5% y/y this year.
Regional divergences are large. On a separate note, the CBR has released its equivalent of the Federal Reserve's Beige Book, and it reaffirms evidence of the recent past: behind the relatively benign headline numbers there is a stark divergence of the outcomes and experiences across the Russian regions.
The most stark polarisation was observed in the numbers related to output – industrial production and housing construction. For instance, in January, housing construction was up +21% y/y in the Central Federal District, whereas it was either in the red or slightly positive elsewhere.
The heterogeneity of the regional trends raises challenges for the CBR, as to how it calibrates the monetary policy normalisation path, so that the regional economic conditions do not diverge any farther.
The Central Federal District visibly outpaced its peers in January. In particular, in industrial production (up +7.5% y/y vs. -2.5% y/y in Russia in total) and new housing construction (+21.2% 3mma% y/y vs. -0.3% 3mma% y/y in Russia in total).
The pick-up in industrial production in the region was associated with i) the launch of new units at the Moscow refinery and ii) the uptick in manufacturing of pharmaceuticals, which was seen on the aggregate level.
In addition, the Moscow Government's objectives to stimulate investment activity and tax incentives supported growth in the region: 58 industrial complexes, 36 technology parks and 15 anchor residents received support in Moscow.
The 'renovation' program, as well as other infrastructural projects have been driving construction (incl. housing) in Moscow.
39 RUSSIA Country Report April 2021 www.intellinews.com