BOFIT Viikkokatsaus / BOFIT Weekly Review 2015/48
Industrial output rose slightly, due almost entirely to the growth in the mineral extraction industries. Crude oil exports continued to rise and natural gas exports recovered further. Manufacturing output again fell slightly in October. GDP contracted 4.1 % y-o-y in the third quarter and for the first nine months of the year 3.7 %.
Russia’s leaders have been saying for some months that the bottom of the recession has been reached and recovery should lie just ahead. The economy ministry is sticking with its forecast that the economy will grow slightly in 2016. The Central Bank of Russia, however, is still predicting that the economy will not recover until the second half of 2016.
When considering the outlook for 2016, a core issue for forecasters is the oil price, which again has been declining in the past month and a half. Several other factors that might weaken recovery have also come increasingly to the fore: inflation forecasts have been revised up slightly while growth in nominal household incomes may stay lower than even the earlier inflation projections. The latest estimates of Russian officials bolster the view that an increase in government budget expenditure, as they have been decided for now, will be slower than inflation. Russian officials and the International Energy Agency (IEA) also estimate that export volumes of Russian crude oil and petroleum products decline next year after strong growth this year.
Key indicators of Russia’s real economy performance
Source: Rosstat.