Economic contraction has slowed down in Russia’s regions

An on-year drop in retail sales was seen in nearly all of Russia’s federal districts in the first half (but less than in January-June 2015). In the greater Moscow area (City of Moscow plus surrounding Moscow oblast) and the Ural Federal District, the volume of retail sales was still down 7−9 % y-o-y. In nearly all other federal districts and St. Petersburg the slid was about 2−4 %.

Fixed investment in the first half was slightly up on year in the greater Moscow area, in the Central Federal District and St. Petersburg and even substantially up in other parts of the Northwestern Federal District as well as Ural Federal Districts. In the Southern and Volga Federal Districts, investment still showed severe declines.

Industrial output (manufacturing and mineral extraction) in the first half grew significantly on year in greater Moscow, the Central Federal District, St. Petersburg and especially in the Southern Federal District. Most other federal districts were unchanged from a year earlier.

Russia’s economic development deteriorated visibly in 2014 and the development has been quite variable across regions during past years (see chart below). Retail sales have contracted throughout the country, and are down over 20 % in Moscow. The investment trend also has been quite uneven. In some federal districts, investment has been flat or growing slightly, while the investment volume dropped 36 % in Southern Federal District over the past two years. Industrial output has fallen in western Russia, but grown in the Southern and Far East Federal Districts.

Real change in core sectors for federal districts and major cities from January-June 2014 to January-June 2016

Source: Rosstat.