Deutsche Boerse poll suggests Russian companies more upbeat but economy still a minefield

By Andrei Skvarsky.

A survey by Deutsche Boerse-owned intelligence company MNI Indicators detected an overall rise in optimism among Russian companies in December after a major drop into pessimism found by a previous survey.

But the business environment in Russia still involved adversities too serious to warrant an assumption that stable economic recovery was underway, according to the returns of the latest of the monthly MNI Russia Business Sentiment surveys, which are polls of executives at manufacturing, service, construction and agricultural companies – about 200 altogether – that are listed on Moscow Exchange.

Though overall there were roughly as many optimists as pessimists among the respondents (November’s poll showed pessimists to be predominant), there was a “sharp” month-on-month fall in positive expectations for the next three months, MNI Indicators said in a statement.

Production volumes increased month on month but the pace of this growth “could prove unsustainable”, the intelligence company said. There had been an increasing inflow of orders but it lagged behind the growth of output, the London-based firm explained.

As before, companies saw the weakening rouble as a negative.

Access to credit had remained a problem for the majority of companies for the third consecutive month.

“Overall the latest data are consistent with the fragile stabilisation in conditions seen in recent months and a slow recovery for the Russian economy. Given the weakness in some of the expectations measures in the survey there is a risk that conditions could worsen again over the short term,” said MNI Indicators chief economist Philip Uglow.

The findings of December’s poll appear to support a recent conclusion by Sberbank, the biggest Russian lender, that Russia has developed a “new economic model”, having adjusted to the low oil prices, and is likely to resume growth in 2016.

But a statement by former Russian finance minister Alexei Kudrin has poured cold water over Sberbank’s point. Kudrin told Russian news agency Interfax in a recent interview that the Russian economy would “continue to fall” if oil prices stayed at today’s level for “another six months or a year”.

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