Russia's Capital expenditure to have improved on external backdrop

Russia's external backdrop improved somewhat in March, as a result of the calming of geopolitical tensions and the gathering momentum of the oil price recovery. Consequently, analysts think that investment demand improved moderately in the month, especially in the light of slightly improved leading indicators. 

According to industrial sector surveys conducted by Rosstat, producer sentiment likely rebounded from a trough and increased in April by a tick versus May. While depressed internal demand and tight credit conditions possibly restrained the investment recovery, unusually high government expenditure in Q1 15 could prove supportive of the accumulation of fixed assets in April. 

The investment in production capacity in April likely improved slightly on a monthly basis (+0.9% mom sa) but stayed in negative territory in yearly terms (-5.5% yoy versus -5.3% in March) expects Societe Generale.