Russia's growth indicators for January indicate towards a rebound in its economic momentum. A rebound was recorded in real wages, retail sales and industrial production for January. Moreover, jobless rate remained unchanged at 5.8%, as compared with an expected increase. Every variable have a somewhat different story. The nominal pace of wage growth increased to around 4% y/y from about 3% in Q4.

Fall in inflation was another factor for the rebound in Russian economic momentum. A clear rise in January purchases helped retail sales; however, this might be temporary. Meanwhile, industrial production appears to have been largely steady since Q2 2015. Hence rebound is mainly because of base effects.

The Russian economy, on the future prospects, seems to be adjusting to lower oil prices. The GDP has fallen to a lower level; however, it is keeping this level instead of contracting further. The economy can rebound or stabilise if there is an improvement or stability in oil prices. However, the economy might face further downside risk if the global oil prices decline further. The Russian economy is likely to contract only slightly in Q1 2016 on sequential basis.