Economic Snapshot for the CIS Countries
September 5, 2019
The Russian downturn to reverberate across most of the CIS economies in 2019
The slowdown in Russia, led by lackluster consumer demand and a bleak external backdrop, continues to subdue the regional outlook. In contrast to most economies, growth will accelerate in Azerbaijan and Kyrgyzstan thanks to solid mining sector activity. Outside the region, Ukraine’s outlook improved amid an upturn in Q2 and a more stable political backdrop.
CIS Countries Monetary & Financial Sector News
Regional inflation ticked down to 4.9% in July (June: 5.0%), mostly driven by another moderation in Russia. Meanwhile, inflationary pressures intensified across most of the region’s other economies, led by jumps in Azerbaijan and Belarus. Outside the region, inflation also rose in Ukraine. Inflation should ease going forward chiefly on weak consumer demand in Russia.
The region’s central banks remained largely dovish in August, either cutting rates or gearing up for their upcoming meetings in September. Policymakers in Belarus trimmed the key policy rates by 50 basis points, while Russia’s Central Bank has been under pressure to sustain the easing cycle amid sluggish economic growth and slowing inflation.
The Russian ruble dived in early August, after Washington announced a new round of sanctions targeting Russia’s access to financial markets. The ruble remained weak through month-end, and the majority of the region’s other currencies followed suit. That said, the RUB should rebound by year-end and is seen driving an overall appreciation in CIS currencies this year.
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CIS Countries Economic News
Ukraine: Inflation falls in August
September 11, 2019
Consumer prices fell 0.3% month-on-month in August, which followed July’s 0.6% decrease.
Kazakhstan: Central Bank hikes the base rate in a bid to curb rising inflationary pressures
September 9, 2019
The National Bank of Kazakhstan decided to raise the base rate by 25 basis points to 9.25%, keeping an interest rate corridor of plus or minus 1.0 percentage point around the base rate, at its latest monetary policy meeting on 9 September.
Russia: Central Bank delivers another rate cut in September and maintains dovish tone
September 6, 2019
At its 6 September meeting, the Board of Directors of the Central Bank of the Russian Federation (CBR) cut the key interest rate by 25 basis points to 7.00%, marking the third consecutive rate cut this year.
Russia: Private sector conditions improve in August; An upturn in Services PMI sector more than offsets another contraction in manufacturing sector
September 4, 2019
The manufacturing Purchasing Managers’ Index (PMI) produced by IHS Markit edged down to 49.1 in August from 49.3 in July.
Russia: Manufacturing PMI ticks down August amid slumping new orders
September 2, 2019
The manufacturing Purchasing Managers’ Index (PMI) produced by IHS Markit edged down to 49.1 in August from 49.3 in July.
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