Economy is being pulled out of the recession, production and spending have gone up.
Abelsky 7/15 (Paul, Free lance journalist, “Russian Industrial Production Expanded for Eight Months in June on Metals”, July 15, 2010, Bloomberg, http://www.bloomberg.com/news/2010-07-15/russian-industrial-production-expanded-for-eighth-month-in-june-on-metals.html)
Russian industrial production climbed for an eighth month in June, signaling manufacturing output may continue outpacing gains in consumer spending and employment. Production at factories, mines and utilities rose an annual 9.7 percent after a 12.6 percent increase in May, the Federal Statistics Service in Moscow said in an e-mail today. Non- seasonally adjusted output fell 0.4 percent from the previous month. The median estimate of 14 economists in a Bloomberg survey was for an annual increase of 11.7 percent. Manufacturers and commodity producers have led the economy out of its steepest contraction on record. Companies including OAO AvtoVAZ are spearheading the rebound. Russia’s largest automaker posted net income of 1 billion rubles ($32.7 million) in the second quarter after losing about 40 billion rubles last year as sales plunged, Chief Executive Officer Igor Komarov told Prime Minister Vladimir Putin on July 13. Manufacturing growth jumped in June to the highest level in more than two years, according to VTB Capital. The government may raise its 4 percent forecast for economic growth this year as the outlook continues to improve, Economy Minister Elvira Nabiullina said on July 15. Gross domestic product slumped 7.9 percent in 2009. The economy grew 4 percent in the first five months of the year, according to the Economy Ministry. The government is spending 11 billion rubles this year on incentives for its cash-for-clunkers program, which helped car sales surge 46 percent in June. “The main positive growth drivers appear to be related to a direct impact of the government’s efforts to reinvigorate the economy,” Renaissance Capital economists led by Alexei Moisseev said in a report. The recovery in output is continuing to outperform gains in consumer spending and employment. Growth in industrial production averaged more than 10 percent in the first five months, while retail sales averaged below 3 percent in the same period. Factories may face less pressure to boost production to rebuild inventories if domestic demand cools. “Consumer spending is on the rise, but recovery of consumption does not look so stable,” analysts at Moscow-based TKB Capital said in a July 12 report. Manufacturing rose an annual 14 percent in June, according to today’s report. Electricity, gas and water output rose 2.3 percent, while mining and quarrying added 4.4 percent. Industrial output shrank 10.8 percent in 2009 and capital investment fell 17 percent, statistics service data show
RTT 10 (“World Bank Downgrades Russia Growth Forecast”, June 17, 2010, RTT News, http://www.rttnews.com/Content/AllEconomicNews.aspx?Id=1336722&SM=1)
World Bank has cut its growth forecast for the Russian economy citing global uncertainties and a relatively subdued performance in the first quarter. The lender forecast the economy to grow 4.5% this year, down from the previous growth estimate of 5.0-5.5%. But the projection is still higher than the Russian government's 4% growth forecast. "Overall, developments in early-2010 indicate that Russia is recovering, but the ride has been bumpier than forecasted at the beginning of the year," said Pedro Alba, the World Bank's country director for Russia. "The slower than expected recovery in domestic demand, coupled with the risks of broader contagion of the Greek crisis to other Western and Eastern European economies, has increased uncertainties over the recovery of the Russian economy." The economy grew 2.9% between January and March this year, which was slightly below expectations. The report said while Russia's public finances are relatively in good order, contagion from the eurozone debt crisis in the form of oil price fluctuations and capital flows cannot be ruled out. The Russian economy is expected to grow 4.8% in 2011.
Serkin 7/16 (Gavin, Bloomberg market reporter and journalist, “Russia Eurobonds Rebounding From Worlds Worst Slump”, July 16, 2010, Bloomberg Business Week, http://www.businessweek.com/news/2010-07-16/russia-eurobonds-rebounding-from-world-s-worst-slump.html)
Obenhuber said he’s been recommending for at least two weeks that clients buy Russia’s 3.625 percent bond due 2015, sold at the same time as the 5 percent 10-year note at 99.475 cents. The 2015 bonds, which gained 5.2 percent to 98.241 since May 25, rose for a fourth day today, advancing 0.1 percent. The 2020 bonds rose 0.3 percent and are up 1.1 percent this week, according to data compiled by Bloomberg. Russia’s economy is set to expand 4.3 percent this year, according to the IMF, as oil recovers, climbing to $76.67 a barrel today from the year low of $68.01 in May. Industrial production rose for an eighth month in June, and real retail sales growth accelerated to 2.1 percent in May from 0.4 percent the month before. The unemployment rate dropped to 7.3 percent in May from 8.2 percent the previous month. Russia, rated Baa1 by Moody’s Investors Service, the third- lowest investment grade, and BBB by Standard & Poor’s, the second-lowest, has public debt equivalent to 7.7 percent of gross domestic product. The debt level compares with the average of 106.7 percent for advanced nations in the Group of 20 and 39.6 percent for the G-20’s emerging market countries including China, India and Brazil, according data compiled by the Washington-based IMF