Financial Pulse: economy shows gradual improvements
Immediately available indicators suggest economic performance is showing signs of an improvement as pandemic-linked restrictions are lifted, reports the new issue of Financial Pulse, a weekly monitoring report of the Bank of Russia.
Positive developments owe their origin mainly to consumer demand-focused sectors. At the same time, performance in intermediate and investment demand-focused sectors is unsteady as external demand remains weak and the negative effects of contraction in oil output are feeding through to related sectors.
With inflationary pressure petering out, the impact of disinflationary factors is strengthening. This is driven by a fading pass-through of this March’s ruble weakening into prices and tighter competition in the context of a sharp drop in demand. Seasonally adjusted price growth in May is estimated at 4% in annual terms.
This week’s positive developments in financial markets were accompanied by a decline in implied volatility of the ruble exchange rate, Russia’s country risk premiums and OFZ yields against the backdrop of sustained interest in ruble assets.
