Russia's manufacturing production data shows that certain sectors have started benefiting from import substitutions as western sanctions and Russia's counter measures have distorted the market.
Foods production expanded 1.4% y/y and 8.1% m/m in September while continuing to grow 1.9% y/y in 9M. As in 2014, Russia has banned imports of certain foods items from the countries that introduced sanctions against it, the best performers being meat production (up 18.0% y/y), frozen fish processing (up 15.7% y/y) and cheeseproduction (up 38% y/y).
At the same time, rouble devaluation has supported exporters, helping chemical production to grow 9.3% y/y in September and, for instance, passenger car tyre production to expand 5.9% y/y.
"The local demand and the depreciated rouble is expected to support industrial production further in the future while a lack of capacity remains a major concern in the medium term", says Danske Bank.
