SERGEY TSUKHLO: “INVESTMENT PLANS OF THE INDUSTRIAL ENTERPRISES REACHED 11-YEARS HIGH”

According to the Gaidar Institute's surveys, in April the index of forecasts for Russian industry came very close to the indicators of February 2022. One of its main reasons is the “decisive growth (even breakthrough) of the balance of investment plans of enterprises, which added 17 p.p. over the month and became finally the 11-year maximum”. (ref. chart).

The latter, as well as a month earlier, was accompanied by the growth of demand forecasts till the end of 2021 and a slight correction of the output plans (the enterprises are not satisfied with the actual sales volume) with the historically high shortage of staff and the minimum overcapacity, while only 9% of enterprises have it now.

Meanwhile, Sergey Tsukhlo, author of the Gaidar Institute surveys, believes that import substitution and increased economic certainty are still the driving force behind the growth of investment plans: while 64% of respondents reported a high level of uncertainty during the current crisis, now this figure is 41%. He noted that the ruble strengthening can support the businesses’ activity, as 70% of respondents say that the current exchange rate has a negative impact on the cost of production, and 60% note that it limits investment.