Q2 real data shows trough for 2015

Q2 looks set to feel the largest (lagged) negative spillover effects from all the geo-political tension, with April Industrial Output providing the first indications at -4.5%YoY. While local food production "benefited" from the substitution of banned food imports, autos and other sectors suffered from the spillover effects of the drastic RUB depreciation until Jan-15. 

"Looking ahead and assuming the situation in eastern Ukraine and also sanctions "stabilize", analysts see Q2 as the growth trough and look for an overall 2015 recession of around 2.8%, followed by 1.5% growth in 2016 : a short-term challenge for the RUB but mid-term supportive", notes Commerzbank.