Macroeconomic Forecast Russia

On the back of further expected devaluations of the rouble, we have revised upward our Russian inflation forecasts through the long term. We now expect consumer price growth to remain in the double digits through 2009 and 2010, coming in at 15.0% y-o-y and 12.0% at the respective end-years. Prolonged elevated inflation will impact political stability in Russia through the medium term, especially as it will run concurrent with a forecast rise in unemployment to 12.0% by end-2009. Already, latest data released from the Federal State Statistics Service indicate that the jobless rate jumped to 8.1% in January, from 7.7% in the previous month.

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