Russian GDP growth slowed in the first quarter of this year

The latest Rosstat figures show that seasonally adjusted GDP in the first quarter increased by 0.5 % from the previous quarter. Seasonally adjusted growth in the fourth quarter of 2021 was still 1.4 %. Private consumption increased by 0.5 %, while public consumption was unchanged from the previous quarter. Capital formation contracted by 1.4 % − in recent years a weaker score was seen only in 2Q20 when the first wave of the covid pandemic hit Russia. With fixed investment growth at 3.0 %, it is evident that companies have significantly drained their inventories in response to war and sanctions. Otherwise, it is still difficult to discern from Russia’s national accounts in the first quarter any other major impacts caused by Russia’s February 24 invasion of Ukraine or the impact of sanctions.

Rosstat did not release national accounts data on exports and imports while sufficient data is available to conclude that net exports in 2016 prices rose markedly in the first quarter of this year. Measured this way, the level of net exports was, however, still lower than in 2020.

GDP showed growth of 3.5 % y-o-y in the first quarter, in line with Rosstat’s earlier preliminary estimate. Real value-added growth in some branches was quite high, particularly in the extractive industry sector (8.6 %). Exports of extractive industry products, including oil & gas, were exceptionally large in the first months of this year. Growth in manufacturing was 5.1 %, while growth was fairly similar also in other sectors of the economy. Value-added in construction was up by 4.7 % y-o-y, retail and wholesale trade grew by 3.7 %, while transportation sector rose by 5.4 %.

Russian GDP hit an all-time high in the first quarter of 2022 (RUB billion in 2016 prices)

Sources: Rosstat and BOFIT.