Russian Services Activity Unexpectedly Rises in April

Russian services ranging from hotels to hairdressers expanded for the first time since September, as an increase in new orders and rising client demand helped businesses.

The Russia Services Business Activity Index rose to 50.7 in April from 46.1 in March, according to data released by HSBC Holdings Plc and Markit Economics. The median estimate of five economists surveyed by Bloomberg was for a worsening to 45.6. A reading below 50 signals contraction.

The unexpected expansion follows a rebound in the ruble from its worst plunge since 1998, which has helped stabilize inflation and allowed the central bank to lower borrowing costs. The world’s largest energy exporter is facing its first recession in six years after oil prices dropped by half last year and the U.S. and the European Union imposed sanctions over the war in Ukraine.

“Activity and new orders ticked up, following sharp contractions earlier in the year,” Andrew Harker, senior economist at Markit, said in the statement. “Companies and workers alike need client demand to keep improving, however, as there remains evidence that spare capacity is leading to job cuts.”

Output prices rose at a weaker pace in the manufacturing and service sectors, according to the HSBC report. The April Composite Output Index rose to 50.8, compared with 46.8 in March.

The ruble gained 13 percent against the dollar in April, becoming the best performer among more than 170 world currencies tracked by Bloomberg. Consumer prices rose 16.4 percent in April from a year earlier, compared with 16.9 percent in March, the Federal Statistics Service said Wednesday.