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Bank of Russia: Talking Trends: gradual revival in economic activity

The easing of anti-coronavirus restrictions that started in May is boosting a revival in economic activity in Russia, which is confirmed by a broad range of up-to-date figures and leading indicators. These findings are given in the new issue of the macroeconomic review Talking Trends prepared by the Bank of Russia’s Research and Forecasting Department. However, the economic recovery is hindered by the secondary effects of anti-coronavirus restrictions manifesting themselves through cross-sectoral interrelations, as well as by oil production cuts and subdued consumer demand.

After April’s acceleration to 3.1%, inflation slowed down to 3.0% in May. The strengthening of the ruble and shrinking demand in April — May weakened the effect of temporary pro-inflationary factors in the economy. Since an upturn of incomes and demand in the economy will be gradual over the next few months, this will drag the seasonally adjusted monthly growth of consumer prices downwards, according to the authors of the review.

Recently, financial markets in Russia and abroad are demonstrating increasing optimism owing to large-scale support measures and the easing of restrictions in a range of major economies. The recovery of interest in high-risk assets and the monetary policy easing by the Bank of Russia have boosted demand for Russian assets.

The findings and recommendations in the review may differ from the official position of the Bank of Russia.

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