Regional economy: business expects improvements in economic situation

In February—March 2021, economic activity continued to recover in Russian regions. More than 60% of the surveyed enterprises participating in the monitoring reported that the demand for their products either exceeded the pre-pandemic level or corresponded to it. Business expectations have improved regarding the changes in production and demand over a one-year horizon, according to the new release of the analytical material Regional Economy: Commentaries by Bank of Russia Main Branches.

Inflation remained high in March. Price movements were predominantly shaped by temporary proinflationary factors: pent-up demand, continued supply constraints in certain markets, and rising costs.

The gradual revival of domestic demand amid easing restrictive measures supported growth in the manufacturing industry and an increase in passenger traffic in the transportation sector. Robust external demand contributed to the growth of coal, gas and diamond production. In anticipation of the termination of a number of preferential mortgage programmes and an increase in rates, the growth of mortgage lending accelerated in many regions.

The expansion of consumer activity was constrained by a slow recovery of household incomes. At the same time, consumers sought to optimise costs, including by moving to a lower price segment.

The new issue includes special topics: limitation of the supply of certain types of products and the situation in the fuel market.