13/3/2013: Irish-Russian Trade & Investment - The Moscow News

Report in Moscow News on Irish-Russian bilateral trade, investment links and current state of growth in economic links between Russia and Ireland:

themoscownews.com/business/20130311/191325204/Russia-and-Ireland-forge-trade-ties-in-busts-wake.html

15/1/2013: Some data and ideas on Russian economy

Russian economy quick summary of some latest stats and some disconnected ideas:

• Q3 2012 real GDP +2.9% y/y down from +4% in Q2 and +4.9% in Q1 2012.
• Expected Q4 2012 GDP growth +2.5%
• November 2012 GDP growth of +1.9% y/y inflation-adjusted
• Q1-Q3 2012 GDP +3.5% y/y
• Q3 2012 consumption +5.1% y/y down from +6.9% in Q2
• Expected full year consumption growth +4% y/y.
• Consumer confidence down to lowest in 18 months (since Q2 2011) in Q4 2012 at -8, Q3 2012 reading was -6.
• Industrial production is up +1.9% y/y in November, manufacturing activity +4%, manufacturing PMI at lowest level in 14 months in December at 50.0
• Services PMI down to 56.1, from 57.1 in November
• Composite PMI at 54.1 - a 4 months low.

Inflation is still a major headache for the Central Bank Rossii, with the level above the target, despite being close to historical lows:

• Headline inflation at 6.6% in December against 6.1% y/y in 2011, making 2012 the second best year in terms of inflation in over 20 years.
• Food inflation is 4.4% for 2012, tobacco up 21.2%. 6% crops failure due to drought in 2012 is taking the blame. Non-food inflation was 5.6% and services inflation at 5.4%.
• Meat and poultry led food inflation (+8.3%), brad and eggs prices up 6.2%.
• Alcoholic beverages prices were up 10.1%

Some consumption trends - food:

• 2012 per capita food consumption (local currency) = +8.7%; forecast compound annual growth rate (CAGR) to 2016 = +10.2%
• 2012 beer volume sales = +2.8%; forecast CAGR to 2016 = +2.9%
• 2012 mass grocery retail sales (local currency) = +24.4%; forecast CAGR to 2016 = +28%

All good news for Irish exporters as food represents a strong component of our exports to Russia (see latest data here).

Central Bank raised inflation target for 2013 from 2012-set 4.5-5.5% for 2013 to 5-6% set on December 29th. 2012 target set in December 2011 was 5-6% range.

Capital outflows remain a problem in 2012:

• 2012 capital outflow stood at $56.8bn - the fourth highest yearly outflow since collapse of the USSR, with $9.4 billion outflows in Q4 2012, up on Q3 outflows of $7.6bn and Q2 outflows of $6.4bn, but down on massive $33.3bn outflows in Q1 2012.
• Net outflows were now recorded every year since 2007.
• Banks recorded an inflow of $23.6bn in 2012, in part pushed up by privatization of Sberbank ($5.2bn)
• Net outflows in non-banking sectors of economy amounted to $80.4bn in 2012.

I do expect moderating capital outflows from Russia in 2013 and still expect strong capex in Russia. Ruble valuations are likely to remain strong despite the Central Bank interventions. At any rate, the CB is likely to moderate interventions in the currency markets as it moves to inflation targeting by 2015 from current FX targets.

On the net, I am still bullish long-term on Russian Government (and corporate) bonds:

• Recent decisions to open rubles-denominated bonds sales to foreign investors via Euroclear Bank and Clearstream International will continue pushing yields down. Renaissance Capital estimated recently that OFZs (ruble-denominated state bonds) yields can fall 50-80bps in 2013
• In 2012, OFZs returned 1.12% against 0.38% for Brazil, 1.36% for India and 0.03% for China.

15/1/2013: Ireland-Russia Bilateral Trade: Jan-Oct 2012 data

Some good data on Irish bilateral trade in goods with Russia. A graph and a table to summarise:

Details in CSO release here.

Very robust rise in exports (+17.6% y/y in Jan-Oct 2012) and in trade surplus (+24.6% y/y). Balance in favour of Irish indigenous sectors, with food & drink sector exports exceeding those of medical devices and pharma and chemicals.

25/6/2012: Q1 2012 Exports to Russia by Category

Per your requests, here is the breakdown of our exports to Russia by category - these are expressed as percentages of total exports to Russia. Data covers Q1 2012 - the latest we have available.

Update: per further requests: here is comparative table for our bilateral trade with Russia (exports of goods) in terms of each category of goods weight in total exports to Russia, compared against each category of same goods share of our total exports. Cells in bold mark goods which are more significant in our exports to Russia compared to our overall exports.

22/6/2012: Bilateral Trade with Russia - January-April 2012

After a couple of months, it is time to update the stats for Ireland's bilateral trade with Russia, especially since this week we saw the release of January-April Trade in Goods data.

Exports to Russia (goods only) rose to €189mln in 4 months from January-April 2012, up on €170mln for the same period of 2011. The y/y increase therefore is running at 11.2% for trade with Russia, against -0.62% contraction recorded for our total goods exports. Among 21 geographies other than EU27, bilateral exports to Russia posted 7th highest rate of growth in first four months this year compared to same period 2011.

Meanwhile, Imports from Russia fell from €54mln to €40mln y/y over the first four months of 2012.

As the result, our trade surplus vis a vis Russia rose from €116mln in January-April 2011 to €149mln for the same period of 2012 - a rise of 28.5% y/y (third largest increase among non-EU27 countries).

When compared to the rest of BRICs, Russia is not the only country that is generating trade surpluses for Ireland's exporters. India accounted for just €81mln in exports from Ireland in the first 4 months of 2012, up on €64mln a year ago, but it generated a trade deficit for us of €74mln in 2012 so far, against a deficit of €73mln in the same period of 2011. Brazil imports from Ireland fell from €94mln in January-April 2011 to €91mln in January-April 2012. As the result of this and due to much higher imports from Brazil, Brazil-Irish trade posted a deficit against Ireland of €100mln in January-April 2012 against a surplus of €31mln a year ago. China accounts for a much larger share of our exports, with exports of €757mln in January-April 2012, down on €759mln in the same period of 2011. However, we imported €859mln worth of goods from China in the first four months of 2012 (up on €855mln in 2011), resulting in a trade deficit against Ireland in our bilateral trade with China.

Crucially, Irish trade balance in goods with Russia is much more value-additive than our trade with any other non-EU27 country, save Australia and Switzerland. In the first four months of 2012, our ratio of exports to imports vis-a-vis Russia rose from 3.15:1 a year ago to 4.73:1. Meanwhile, our overall trade in goods imports intensity rose from 1.76:1 in 2011 to 1.81:1 in 2012.

Forecasts for 2012 bilateral trade with Russia based on historical trend and latest changes in volumes is provided below:

30/3/2012: Irish bilateral trade with Russia - 2011 results

The latest data on Irish-Russian bilateral trade: