Russians are spending money. After a robust manufacturing report, now the service sector is booming as well. It seems the combined effects of the OPEC deal and the election of Donald Trump have brightened Russian spirits.
Russia’s services sector unexpectedly improved in January at the fastest pace in eight-and-a-half years, boosted by higher new orders and improved optimism on the outlook, survey data from IHS Markit showed Friday. The Markit Russia Services Business Activity Index rose to 58.4. from 56.5 in December. Economists had forecast a score of 55.9, reports RTT.
In addition to rising prices and continued increases in new orders, Russian companies began hiring again as well. IHS Markit economist Samuel Agass said the firm is forecasting 0.8 percent GDP growth for 2017.
This would signal the end to the current Russian recession. However, there are a lot of ‘ifs.’ The OPEC deal could fall apart, American shell producers could pick up the slack, or the recent thaw in relations with the U.S. could sour quickly over Ukraine or Iran.