FXStreet (Delhi) - Yann Quelenn, Market Analyst at Swissquote Bank, suggests that the research house do not have high expectations for the Q3 GDP forecasted result, which is expected to contract to 4.3% y/y amid a crude oil barrel price below 47$. Key Quotes “In September, the Russian economy continued to contract after the GDP printed at a very poor -4.6% year-on-year. The main drivers were the lingering low commodity prices. Indeed, oil prices accounts for a major part of Russian revenues. At the same time, economic data is still concerning. Last retail sales showed a 10% m/m decline in October. We only saw a deceleration in the contraction of capital investment and consumer spending, which shows sign of hopes in a recovery. In spite of this overall data is still very negative.” “It is important to note that the correlation between the ruble and oil prices has never been so high. In addition, the greenback is worth a little over 65 rubles. The USDRUB is still driven upside by the stronger-than-expected last Friday’s NFP, U.S. December rate hike expectations and low crude oil prices.” “However, Russia’s economy is not in agony but inflation still remains a serious concern. This week, Russia’s inflation has risen by 0.2% for the fifth week in a row. Inflation remains very high and annual CPI should end up around 15%, which is seriously limiting the room for the Russian central bank to cut rates. Between very negative growth and high inflation, Russia is struggling. We believe that the key rate will hold at 11% at December meeting.” For more information, read our latest forex news.