The Russian economy shows signs of investment activity

Economic recovery in September remained mixed. According to figures from October issue of information and analytical commentary ‘Economy: Facts, Evaluations and Commentary’, despite structural restraints and weak demand, the investment indicators performed increasingly better.

The improved output of investment goods (month-on-month seasonally adjusted) and the continued growth in machinery and equipment imports implied a recovery in investment activity. Better investment performance may be partially due to the continued softening of non-price lending conditions for corporate borrowers, according to the commentary.

At the same time, it is too early to state that the investment slowdown is over. Conservative corporate investment policies constrain the growth of fixed capital investments due to, among other things, the uncertainty of future demand.

At the same time, domestic demand improved in September: monthly sales of non-food goods have grown (seasonally adjusted), sales of certain durable goods are up (automobiles, household appliances and electronics). This may well be a result of a partially deferred demand.