Moscow - Prone to false starts since a crisis peaked last year, Russia’s economy is riding momentum that has it on the cusp of exiting the longest recession in two decades. As business sentiment perks up, leading indicators from demand for electricity to rail cargoes and container transport show the pulse of the economy is starting to beat faster.
Data due this week will show gross domestic product last quarter contracted the least since it slipped into recession at the start of 2015, shrinking 0.8% from a year earlier, according to the median of 19 estimates in a Bloomberg survey. “A fundamental infrastructure sector such as electricity offers a good reference point for the economic health of a country overall,” Renaissance Capital analysts Vladimir Sklyar and Anastasia Tikhonova said in a research note. “Applying for a grid connection and making a significant payment for it requires a long-term positive view on economic trends, and a spike in such orders in 2016 indicates to us that Russian economic agents are feeling much more optimistic than a year ago.”
Unlike the hairpin turns taken by the economy after its recessions in 1998 and 2009, which set the stage for sharp rebounds, the world’s biggest energy exporter has been slower to retool this time (read more).