Russian capital expenditure fails to recover from losses

Investment in Russia continued to be depressed, driven by pessimistic expectations expressed by enterprises in a series of recent surveys conducted by Rosstat. The gradual decline in business confidence has been accompanied by further reduction in capacity utilisation which is holding back newer investments in a wide range of industries. 

Although ruble depreciation provides some relief for export-oriented producers, weak expectations of recovery in external demand still weigh on sentiment and hold back the accumulation of capital stock.

"Softer investment trends are anticipated in July which could persist and bring the headline FAI figure to -7.8% yoy", says Societe Generale.