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FXRussia
Reports2 December 2018
Russia in 2019: Risk-averse mode
All our key messages and forecasts for Russia for the year ahead
Executive summary
- GDP growth at a modest 1.0% due to weakening household consumption as a result of higher VAT rate and declining confidence in sustainable income growth
- Corporate activity limited around state-sponsored projects, local corporate loan growth not broad-based, mostly reflects infrastructure projects and substitution of foreign debt
- Rouble to remain stable on balanced current and capital accounts unless portfolio flows deteriorate. Sanctions against new state debt not priced in, remain a downside risk
- Key rate unlikely to go lower on mounting CPI risks (VAT hike, gasoline prices) and external uncertainties (US-China, US-Russia)
- Budget policy likely to be eased on expenditure in response to weaker GDP, declining popular support; and on revenues (oil tax manoeuvre/excise) in response to gasoline price risks
- Banking sector: more interconnected with CBR and the Ministry of Finance. Interbank interest rates depend on budget rule-related FX purchases and key rate expectations.
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This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more