By Ferit Yildirim, Yulia Bogomol, Maria Bovykina MSc, Inna Zakharova
Over 2008, the Russian economy grew by 5.6%; the pre-crisis forecast for 2009 anticipated 6.7% growth of GDP. Recently the Economic Ministry published the updated forecast for 2009: GDP growth in 2009 was revised to -2.2%, industrial production is expected to decline 7.4%. URALS oil price and RUB/USD rate are estimated at $41/bbl and 35.1, respectively.
On February 4, Fitch cut Russian sovereign rating to BBB from BBB+, outlook Negative. The agency is concerned with decreasing foreign reserves and possible difficulties with external debt refinancing.
We see some signs of stabilisation in the oil price and on the currency market. While this is likely to bring a positive movement to the stock market, it will take some time for the real production sector to recover. According to January-February data from Rosstat, the Russian economy showed a steady decline in most indicators. The year-on-year (yoy) decrease in industrial production was registered at 16% in January and 13.2% in February, fixed capital investment reduced by 15.5% and 14.1% yoy respectively, and real disposable income dropped 10.2% in January and 4.7% in February yoy.