Recession hits Russian regions

BOFIT Viikkokatsaus / BOFIT Weekly Review 2015/37

Private consumption has fallen considerably. The volume of retail sales in the first half was down 6–12 % y-o-y in most of the eight Federal Districts. The decline in the three most northwestern Federal Districts was distinctly worse than during the 2009 recession. In 22 of Russia’s 83 administrative regions, the on-year contraction was 10 % or more.

Fixed capital investment, which began to fall in almost every Federal District already in 2014, has continued to slide this year. In the first half, investment nationwide was down more than 5 % y-o-y. Variations at the regional level were huge, however. Some 33 regions showed investment declines of at least 10 % y-o-y, while 19 regions saw investment slide at least 20 %. At the same time, investment increased by more than 5 % y-o-y in 23 regions.

Industrial output has been falling especially in the Central Federal District due to notable contraction in the production of several sectors in the City of Moscow and surrounding Moscow region. In the first half of the year, industrial output in 15 regions fell by more than 5 %, while output was up over 5 % in 24 regions.

Real economic growth in Russia’s seven Federal Districts and largest centres
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Source: Rosstat

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