Russian manufacturers performed remarkably well in February than expected as the ruble weakened while Kremlin banned food imports, boosting local production.
Russia’s Purchasing Managers’ Index rose to 49.7 last month, up from 47.6 in January, a joint survey by Markit Economics and HSBC Holdings Plc showed. Economists surveyed by Bloomberg News had expected the figure to average 47. A measure under 50 indicates shrinking activity.
Moscow is currently seeking measures to prevent the onset of its first recession since 2009 amid low oil prices that are currently trading at six-year lows. Matters haven’t been helped by penalties crafted by U.S. and its European allies in order to punish Russia for interfering in the Ukraine conflict. However, the Economy Ministry believes the food import ban will catalyze production in some industries.
“Stronger domestic demand boosted Russian manufacturing output in February, with import substitution reported to have played a role,” Bloomberg News quoted Trevor Balchin, a senior economist at Markit, as saying. “In contrast, new export business declined for a survey-record 18th successive month, and at a faster pace.”
The Economy Ministry expects the food import ban to boost agriculture and food industry. It based the forecasts on the oil price averaging $50 per barrel and the ruble trading at 61.5.
Elsewhere, U.S. consumer spending declined for the second consecutive month in January as consumers opted to cut back spending and save the windfall resulting from lower gasoline prices.
U.S. consumer spending, which contributes at least two-thirds of U.S. economic output, fell 0.2 percent after dropping 0.3 percent in December. Falling sales of big-ticket output as well as lower gas prices, which affected the bottom line in service stations contributed to the dip in January. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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