Contraction of Russian GDP continued in the third quarter

Preliminary Rosstat figures show that Russian GDP contracted by 4 % y-o-y in the July-September period (second quarter contraction was 4.1 % y-o-y). The economic impacts of Russia’s invasion of Ukraine are now clearly reflected in the country’s main economic indicators, particularly domestic demand. Branches dependent on imported inputs and components from foreign suppliers have also been struggling.

Wholesale trade was sharply impacted in the third quarter, falling by 23 % y-o-y. The volume of retail sales shrank by 9 %. Freight traffic fell by nearly 6 %, while manufacturing output was down by 2 %. Supported by large harvests this year, agricultural output rose by 6 %. Construction activity remained robust, climbing by nearly 7 % y-o-y. Russia supports construction in many ways, including subsidised loans.

The most recent forecasts see Russian GDP shrinking by 7‒8 % during 2022–2023. The average of the 19 institutional forecasts compiled by Consensus Economics finds Russian GDP contracting by 4.2 % this year and 3 % next year. Our latest BOFIT Forecast for Russia released in October sees Russian GDP declining by 4 % both this year and next.

Russian GDP continued to contract throughout the third quarter.

Sources: Rosstat, Macrobond, BOFIT.