2014 Forecast Downgraded On Disappointing Imports And Retail Data
BMI View : We do not expect to see pickup in pharmaceutical import demand and accelerated growth in pharmacy sales over the course of 2014. Coupled with weakening consumer sentiment and reserved government expenditure on pharmaceuticals, our 2014 forecasts have been downgraded. We now see Russia's import reliance declining much faster than anticipated as more multinationals localise production to head-off upcoming restrictions.
We have recently downgraded our full year pharmaceutical forecast for Russia in the wake of disappointing import figures and less than expected growth in commercial pharmaceutical sales in the first quarter of 2014.
Imports posted a decline of 18.3% in US dollar terms in Q114, precipitated by the Ukraine crisis and the sell-off in the Russian rouble, as Russian wholesalers and importers held off re-ordering and burned through inventory stocks. In April 2014, imports declined by 2.05% indicating a tapering in the decline and a boost in demand from inventory re-stocking, but weakening consumer sentiment will weigh on demand for pharmaceuticals over the course of 2014. Support for the pharmaceutical market from government purchasing is unlikely to move the needle in terms of imports and pharmaceutical demand in 2014.
|Tapering In Import Decline In April|
|Pharmaceutical Imports, USDbn|