Russian manufacturing slump unexpectedly extends to fourth month
By Bloomberg
Russian manufacturers reported deteriorating conditions for a fourth month, with output, employment and new orders falling as the economy enters its first recession in six years.
The Purchasing Managers’ Index fell to 48.1 in March from 49.7 the previous month, HSBC Holdings Plc said in a statement, citing data compiled by London-based Markit Economics. The median estimate of three analysts in a Bloomberg survey was for an increase to 50, the mark that divides contraction from expansion.
The “survey data indicated that operating conditions remained challenging overall,” Paul Smith, a senior economist at Markit, said in the statement. “Access to working capital also remains a hurdle to overcome for a number of manufacturers.”
The economy of the largest energy exporter is falling into its first recession since it contracted 7.8 percent in 2009 after lower oil prices added to damage from sanctions over the crisis in Ukraine that limited access to international capital markets. Inflation is stabilizing after soaring to the fastest pace in almost 13 years after the Bank of Russia increased its key interest rate six times last year.
The ruble, which lost 46 percent against the dollar in 2014, is the best performer among 24 emerging-market currencies tracked by Bloomberg this year with 4 percent gain versus the greenback. It traded 0.4 percent weaker at 58.4080 to the dollar as of 11:53 a.m. in Moscow.
Gross domestic product may shrink 4 percent this year after expanding 0.6 in 2014, according to economists surveyed by Bloomberg. Inflation accelerated to 16.7 percent from a year earlier in February, compared with 15 percent in January. On a monthly basis, consumer-price growth slowed to 2.2 percent from 3.9 percent.
“With inflation falling back sharply over the month, there is hope of at least near-term stability,” Smith said. “Some panelists indicated positive growth projections and in a number of cases added to their workforces.”