The VanEck Vectors Russia (NYSE:RSX) is in focus this week, as Russia’s economic growth appears to slow considerably.
Russia’s gross domestic product (GDP) — the most widely used measure of a country’s economic expansion — has seen its momentum wane as of late despite higher oil prices. Bloomberg has more details on the development:
After getting a short-lived boost from inventory restocking, the economy of the world’s biggest energy exporter added an annual 2 percent in the third quarter, down from 2.5 percent in the previous three months, according to the median of 18 forecasts in a Bloomberg survey. The Economy Ministry estimates output increased 2.2 percent in the period, putting it close to the central bank’s view. The data is due in Moscow on Monday.
Despite a government vision of an economy remade by the crash in energy prices and a currency crisis that followed, Russia is increasingly resembling its old self as consumer demand comes to the fore.
Despite oil’s recent price recovery, Russia isn’t really feeling the positive effects. That’s because the nation’s net exports are actually hurting amid an uptick in import growth. Bank of Russia Governor Elvira Nabiullina warned recently that even $100 per barrel oil wouldn’t be enough to spur GDP growth beyond the baseline goals of 1.5% to 2%.
The VanEck Vectors Russia ETF rose $0.11 (+0.49%) in premarket trading Monday. Year-to-date, RSX has gained 5.00%, versus a 16.53% rise in the benchmark S&P 500 index during the same period.
RSX currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #5 of 84 ETFs in the Emerging Markets Equities ETFs category.