By Andrei Skvarsky.
A Deutsche Boerse survey suggests that business confidence among major Russian companies hit “a record low” this month as did production and orders, marking “a miserable end to what has been a terrible year for the Russian economy”.
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Global business data provider MNI Indicators, a Deutsche Boerse subsidiary, said its MNI Russia Business Indicator dropped to 45.5 in December from 51.5 in November, the first fall below 50 since the firm launched its monthly Russia surveys in March.
Production and orders “also hit their lowest level on record, in a year which has seen GDP growth slow to the weakest in four years and inflation rise sharply,” MNI Indicators said in a report on the survey – a poll of executives at companies listed on Moscow Exchange.
Companies were slightly less pessimistic about Russia’s macroeconomics for the next three months than they were in November but, overall, the findings of the poll suggest that growth will keep slowing down.
“The Employment Indicator, which measures the amount of labour demand from businesses, increased slightly in December, having hit the lowest on record in November, but remained at a low level,” the report said.
“President Putin has finally acknowledged that Russia’s problems are mainly domestic as opposed to external. The authorities, however, have yet to deliver a credible blueprint on how they intend to lift the economy out of stagflation and tackle the long list of supply side issues the economy faces,” it said.
“The December survey is a miserable end to what has been a terrible year for the Russian economy,” said MNI Indicators chief economist Philip Uglow.
“Officials seem to realise the hole that Russia is in, although it will be a difficult job to dig themselves out. While the central bank may find room to cut interest rates next year, the government needs to urgently take action to change the growth model,” he said.
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