Still waiting for Russia’s economic recovery

The latest Rosstat figures on GDP demand components and imports show that the volume of Russian exports of goods and services recovered from a first-quarter slump in the second quarter, with exports rising to a level on par with 2Q15. The decline in imports of goods and services also began to level off, with the volume of imports down less than 7 % y-o-y in 2Q16 compared to nearly 9 % for the first half overall.

The foundations for economic recovery look still rather shaky, with private consumption decline deepening to 5 % y-o-y in 2Q16. The drop in fixed investment slowed considerably, however, but was still over 4 % y-o-y. As in 1Q16, decline of the overall GDP was in 2Q16 cushioned by the considerably milder inventory adjustment than a year earlier.

CBR preliminary estimates for the third quarter indicate the economy’s 3Q performance was much like in the first half. Consumption and investment on-year were down a few per cent, but GDP overall was down just about 0.5 % y-o-y thanks to stabilising inventories and bumper harvest. The CBR estimates that seasonally adjusted GDP remained largely unchanged from the second quarter.

Change in Russia’s real GDP, imports and demand components

Source: Rosstat.