The outlook for Russia's growth looks sober both from a demand and supply perspective. According to a preliminary estimate carried out by the Ministry of Economics and Development, GDP contracted by 4.3% yoy in Q3 15, or 3.8% ytd.
This estimate reduces the quarterly contraction on a seasonally-adjusted basis of 1.0% qoq in Q2 15 to a contraction of 0.3% qoq (seasonally-adjusted) in Q3 15, but, should the contraction continue, yearly growth would fall below the estimate of a 3.5% contraction and come closer to the updated official projections (-3.9 to -4.0% yoy).
Nonetheless, this dull economic picture only strengthens the view that the CBR needs to relaunch an easing cycle to bring the key rate to 10.0% by the end of 2015, states Societe Generale.
