Latest Market Insight

2 September 2021

Economic Update

Just four weeks before parliamentary elections in Russia’s State Duma,Russian President Vladimir Putin has called for one-off cash payments to be awarded to Russia’s pensioners ($135) and military service personnel ($200). The payouts will benefit more than 47 million Russians equivalent to 40% of those eligible to vote. However, the stimulus payments could result in further modest price rises as the extra cash will result in a 0.9% boost in consumption and could add 0.2 percentage points to inflation, which is running at a five-year high of 6.5%.

The Russian rouble is gaining in value as oil rebounded from its worst week this year.The rouble is generally stable against the dollar (73 per dollar) and slightly increased in value against the euro (87 per euro), amid stabilization of oil prices at the psychologically significant level of $70 per barrel.

Nearly 40% of Russians have reduced their spend due to a reduced income, according to a survey by the independent Levada Center. Among these respondents, some 75% cannot afford to buy required groceries and nearly 90% cannot afford to make major purchases for their homes. More than 37% have noticed an increase in the price of goods and services. Some 31% expect that prices will rise faster than their current rate in the next 1-2 months.

COVID-19 update

Russia reports gradual daily decrease of new covid infections over last 10 days, 18 325 new cases were registered in Russia on 30 August, 1 424 new cases in Moscow (4.7% of all cases registered in Russia) and only 549 (3%) in St Petersburg.  This positive trend has allowed all schools to start the new academic year in the “normal way” from the 1st of September. 

Moscow will offer small stimulus payments to businesses in the capital that have vaccinated at least 60% of their employees against the coronavirus. The new handouts will be set at a flat payment of $200 per business with an additional $90 for each employee. Russia will launch a nationwide lottery for vaccinated Russians. There will one thousand winners who will be randomly selected to receive cash prizes of 100,000 rubles ($1,360).

Thailand will allow tourists vaccinated with Russia's Sputnik V to enter its Phuket Sandbox areas.

Outbound tourist flow from Russia for the first half of 2021 still down compared to 2020

According to the Russian Border agency, 6.8 million Russians travelled abroad from January till the end of June in 2021 (for all travel purposes, not only leisure travel). This is a 15% decrease compared to the first half of 2020, this is because Russians could still freely travel until the end of March 2020. This is 68% reduction compared with the same period in 2019, prior to the pandemic.

International Leisure travel flows from Russia in the first half of 2021 decreased almost two times (49%) compared to the same period in 2020 and amounted to 1.8 M people, according to the Association of Tour Operators of Russia (ATOR).  Almost half of all leisure trips (45.3%) were to Turkey. Compared to 2020, Turkey has seen a large increase in the number of visitors (+135%), but it is still very far from pre-pandemic volumes.

Top 10 destinations for Russian tourism in 2021 H1

Destination

% total outbound trips

No of trips

Compared to 2019 H1

Turkey

45.3%

806 212

-70.6%

UAE

16.5%

294 494

- 43.1%

Cyprus

 9.7%

172 671

- 52.17%

Egypt

 6.5%

115 521

n/a*

Maldives

 5.2%

  91 981

+ 206.8%

Tanzania

 4.8%

  85 348

+ 682.7%

Cuba

 4.0%

  71 651

+  8.2%

Serbia

 2.0%

  35 653

- 26.9%

Greece

 1.8%

  32 650

- 88.1%

Tunisia

 

  29 029

- 90.3%

*no leisure travel until 2021 was allowed

Countries which accept Russians vaccinated with Sputnik V

Sputnik V was authorized in 69 countries worldwide as of August 2021. Russia applied for the vaccine approval in the European Union in January, while several EU countries approved its use earlier, such as Hungary or Slovakia.

Countries which accept Russians vaccinated with Sputnik V without restrictions:

  1.      Hungary
  2.      Turkey
  3.      Cyprus
  4.      Moldavia
  5.      Montenegro
  6.      Estonia
  7.      Tajikistan
  8.      Azerbaijan
  9.      Venezuela
  10.   Armenia
  11.   Romania
  12.   Kyrgyzstan
  13.   Egypt
  14.   Mongolia
  15.   Madeira, Portugal (the mainland of Portugal does not)
  16.   Bulgaria
  17.   Thailand

Countries which accept Russians vaccinated with Sputnik V with a negative PCR test:

  1.      Croatia
  2.      Jordan
  3.      Greece
  4.      Bahrain
  5.      Tunisia
  6.      Morocco
  7.      Mauritius
  8.      Serbia

Countries which accept Russians without vaccination or PCR test:

  1.      Albania
  2.      North Macedonia
  3.      Dominican Republic
  4.      Mexico

Russians vaccinated with Sputnik V now can enter Thailand

The Thai government has approved the borders opening for travellers vaccinated with Sputnik V. Vaccinated tourists have to spend seven days on Phuket, after that they are allowed to travel to the provinces of Surat Thani, Krabi and Phang Nga.

Vaccinated Russians are not required to follow the 14-day quarantine upon arrival; however, they have to self-isolate for 1-3 days for their negative PCR test results. For travellers planning to spend 14 days or more in Thailand, they need to pass up to five PCR tests: one prior to departure, another upon arrival, then in 2-3 days and two more on 7 and 12 days.

Indonesia recognises Sputnik V

Russian Sputnik V vaccine has been approved for emergency use in Indonesia. The recognition of the Russian vaccine is good news for Russian travellers, but only for the future, since the country is currently closed to tourists. The authorities planned to open the most popular tourist destination – Bali, this summer, but this never happened due to the spread of the Delta virus. According to Deputy General Director of Ambotis Holidays, so far, Russians can enter Bali with a business visa but few travellers consider this destination as a winter escape.

Aviation News

Charters flights to the Dominican Republic are approved. The Dominican Republic will resume 3 charter flights from Moscow, including Moscow - Punta Cana, Moscow - La Romana and Moscow - Puerto Plata routes with a total frequency of 3 flights per week.

Flights return to Bahrain, South Korea and Czech Republic. From August 9, regular flights were resumed on a reciprocal basis with Bahrain on the Moscow-Manama route returning with a 2 flight a week frequency. From August 27, Russia lifted restrictions on regular flights to South Korea and the Czech Republic. In addition, flights between Moldova resumed from Moscow to Chisinau with a frequency of 3 flights per week.

Increased flights frequency to Hungary and Cyprus. From 27 August, the number of flights from Moscow to Budapest increased from four to seven flights per week; weekly flights to Hungary also start from the Russian regional cities of Sochi, Kazan, Ekaterinburg, Krasnodar, Rostov and Samara.The number of flights from Moscow to Larnaka and Pathos have been increased to daily flights; from other regional cities in Russia the flights frequency to Cyprus increased from two to four flights per week. 

The budget airline WizzAir to open a hub in St. Petersburg. According to Hungarian Foreign Minister, strong cooperation has been developed with Russia, including the opening of an air hub of the Hungarian budget airline WizzAir in St. Petersburg. In addition, it is planned that Wizz Air will increase the number of flights between Budapest and Moscow from four to seven flights per week and launch a new flight between Budapest and Yekaterinburg.

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