Russia: solid 2012 growth masks second half slowdown

Preliminary data showing that Russia grew by a solid 3.4% in 2012 masks the fact that the economy slowed fairly sharply over the course of the year and is now growing by around 2% y/y. The recent improvement in the global outlook suggests that the economy should start to recover this year, but growth will remain subdued – we are nudging up our 2013 forecast from 2.0% to 2.8%. Crucially, trend growth in Russia has slowed, limiting the room for policy easing to support a sluggish economy.