uploads///russia industrial production

Industrial Production Contracts in Russia in June, RSX Falls 1.6%


Nov. 20 2020, Updated 1:52 p.m. ET

Low industrial production adds to Russia’s woes

Russia’s woes have only deepened, with the Federal State Statistics Service releasing industrial output figures for May. Industrial production in Russia declined by 4.8% in June on a year-over-year basis. The Russian equity–tracking VanEck Vectors Russia ETF (RSX) was down 1.6% on July 15—on the negative indicator reading. The iShares MSCI Emerging Markets ETF (EEM) has about 4% exposure to Russian equities. It was down about 1.1%. These funds have yielded 21.80% and -2.39%, respectively, this year.

Article continues below advertisement

Russian industrial production has been hit by western sanctions

The Russian economy has seen a slowdown over the past year amid a global drop in oil prices. Oil exports are the backbone of the Russian economy. Russia derives about 50% of its budget revenue from oil and natural gas industry taxes. With the oil price drop, Russian oil firms’ revenue took a hit—like Rosneft (OJSCY), Lukoil (LUKOY), and Open Joint Stock Company Gazprom (OGZPY). Though oil prices have seemed to be recovering lately, the Iran nuclear deal, has again cast doubt on the rising trend, adding much volatility to the commodity market.

Currently, Russia is also combating the negative consequences of the western sanctions. They’re depleting export revenue—not to mention the flight of capital from the country. Are the central bank’s rate cut decisions enough to stimulate the sinking economy, or does the Russian economy need more?

Stay updated on our latest analysis on the US, Eurozone (VGK), and world (ACWI) macro environments by visiting Market Realist’s Macro ETF Analysis page.

Citigroup and Google to grab investor attention on July 16

On July 16, companies such as Citigroup (C), eBay (EBAY), Goldman Sachs (GS), Google (GOOG), Philip Morris International (PM), Schlumberger (SLB), Taiwan Semiconductor Manufacturing (TSM), and UnitedHealth Group (UNH) remained in the spotlight as they reported their earnings for the second quarter.


More From Market Realist

    • CONNECT with Market Realist
    • Link to Facebook
    • Link to Twitter
    • Link to Instagram
    • Link to Email Subscribe
    Market Realist Logo
    Do Not Sell My Personal Information

    © Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.