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  "documentTitle": "Global Economics Intelligence (August 2023)",
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  "notes": "The slide provides a narrative summary of macroeconomic indicators for Russia as of August 2023.",
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      "text": "In response to rising inflationary pressure and the ruble's slide, the Bank of Russia raised its key rate by 100 basis points in July and by 350 bp in August, to 12%.",
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      "text": "GDP growth: 1.5%",
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      "text": "After several consecutive months of recovery, growth in industrial production stalled in June; though it was still 6.5% higher on an annual basis. The rise has been driven by sectors benefitting from higher military spending. At the same time, mining output stalled in Q2 as natural gas production was down. In its recent report, the International Energy Agency estimates that, in May-June, Russia largely fulfilled its pledge to cut oil production by 500,000 barrels per day from February’s crude output level.",
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      "text": "Russia’s fiscal situation improved slightly in recent months, as budget revenues increased on higher output, wages, consumption, and profits. Still, year-to-date federal budget revenues were down 8% y-o-y in July, depressed by the slide in oil and gas taxes. Federal budget spending slowed to around 14% y-o-y in June. As a result, the 12-month running budget deficit stands at around 5% of GDP.",
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      "text": "The recovery in private consumption also continued, with retail sales in Q2 growing 9–10% y-o-y, despite a small cumulative drop of 1.2% in May–June. This was supported by the labor market, revival of lending, and real household incomes recovering to levels from two years earlier—annual growth in real wages accelerated to 13.3% in May, while unemployment reached historical lows of 3.1% in June.",
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      "text": "Production, consumption, and imports increase on annual basis; resilient 1H 2023 supports outlook; substantial fiscal deficit; inflationary pressures and significant ruble depreciation trigger key rate hike.",
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      "text": "In July, inflation picked up to 4.3% y-o-y and core inflation to 3.2%. In mid-August, the ruble’s exchange rate reached its lowest value since spring 2022: 100 per US $1. Since then, it has regained some losses and, on August 21, was trading at 94.2 per US $1. Nevertheless, the Russian currency has lost about 40% of its value since last August. In response to rising inflationary pressure and the ruble’s slide, the Bank of Russia raised its key rate by 100 basis points in July and by 350 bp in August, to 12%. The ruble’s vanishing value reflects the end of a period of exceptionally high current account surpluses.",
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      "text": "Russia’s imports also bounced back on the economic recovery: in Q2 they were up by 33.5% y-o-y, stabilizing at roughly the same as the 2021 average. Growth in real volumes was more moderate due to a rise in import prices. Exports declined by 32.7%, due to lower prices and sanctions on Russian exports, as did the trade surplus—by about 75%. Mirror statistics from Russia’s trading partners enable evaluation of shifts in the trade structure: for example, imports of advanced technology drags on overall imports recovery, while nearly 60% of Russia’s total oil exports (crude oil and refined petroleum products) now go to China and India.",
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      "text": "The IMF raised its growth outlook for Russia to 1.5% (from 0.7%) this year, due to fairly strong growth in the first half of the year. The Bank of Russia forecast expects growth in the range of 1.5–2.5% and the July average consensus forecast puts growth at around 0.5%. Government spending is to remain the main driver of growth, with private consumption following.",
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      "text": "Source: BOFIT; IHS Markit; Oxford Economics",
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