Russia’s manufacturing slump should be temporary

We suspect that the sharp slowdown in Russia’s manufacturing sector in the second half of 2018 was due to a fall in public spending on military and railway transport. If we’re right, manufacturing should recover in 2019 as defence and infrastructure expenditure picks up. This could plausibly add 0.2-0.3%-pts to GDP growth this year, adding to reasons to think that growth will hold up a bit better than most expect.