Russian economy likely to contract in 2015

The Russian economy posted a moderate growth rate of 05 percent in 2014 is expected to post a negative growth rate in 2015. The economy is expected to contract by 3.9% year on year in 2015, estimates Danske Bank. 

The contraction is due to weaker oil prices as well as aggressive monetary policy. Moreover, key indicators like private consumption and fixed investments are also weak.

"Growth in private consumption continued to be in negative territory throughout January to October 2015 as the demand-side shock is having a serious impact. High food inflation is weighing heavily on private consumers, posting 18.4% y/y in October and 21.2% y/y for 10M", notes Danske Bank.