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World Economy

OPEC Monthly Oil Market Report – September 2017

21

Graph 3 - 12: Russian inflation vs. Interest rate

Graph 3 - 13: Russian PMIs

The IHS Markit Russia

manufacturing

PMI continued to show improvement in the sector’s business

conditions in August. However, growth in new orders and production were slower than in the previous month.

As such, the index decreased to 51.6 in August, from 52.7 in July. The index survey showed the sixteenth

consecutive month of increase in production, while the workforce showed some weakness.

Industrial

production

rose for the fifth consecutive month, up by 1.1% y-o-y in July. The services activity PMI

suggested solid growth in the

services sector

in August, highlighting the ninth consecutive month of

improvement. The index stood at 54.2 in August, up from July’s 52.6. The survey highlighted an acceleration

in output together with a strong increase in new orders and muted price pressure. For the fourth month in a

row,

retail sales

increased in July. The rate of increase was 1.0% y-o-y, which represents the second-fastest

growth in retail sales since December 2014.

Graph 3 - 14: Russian industrial production

Graph 3 - 15: Russian retail sales

The

GDP of Russia

is anticipated to grow by 1.5% and 1.4% y-o-y in 2017 and 2018, respectively.

India

Indian GDP growth

slipped to 5.7% y-o-y in 2Q17, which is below the 6.1% seen in 1Q17, although market

expectations were for about 6.6% to 6.8%. It remains the weakest growth rate since 1Q14 due to a

slowdown in consumer spending and exports. On the production side, manufacturing and agriculture eased.

Figures for 2Q17 mark the third consecutive period of slowing growth as a result of the demonetisation

programme started in November 2016, which removed about 90% of India's currency in circulation as well as

the implementation of the

Goods and Services Tax

(GST) in July this year. Growth has been slowing for

five quarters now, and the government’s target of over 7% for 2017 suddenly appears unsound. It seems that

a reason for the GDP growth weakness in 2Q17 is related to people’s reaction against demonetisation and

3.9

9.0

2

4

6

8

10

12

Jul 16

Aug 16

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

%

Sources: Federal State Statistics Service, Central Bank of

Russia and Haver Analytics.

Inflation rate

Interest rate

51.6

54.2

48

50

52

54

56

58

60

Aug 16

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Aug 17

Index

Sources: IHS Markit and Haver Analytics.

Services PMI

Manufacturing PMI

1.1

-4

-2

0

2

4

6

8

Jul 16

Aug 16

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

% change y-o-y

Sources: Federal State Statistics Service and Haver Analytics.

1.0

-6

-5

-4

-3

-2

-1

0

1

2

Jul 16

Aug 16

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

% change y-o-y

Sources: Federal State Statistics Service and Haver Analytics.