Russia: Economic growth moderates in Q3
GDP growth waned to 4.3% year-on-year in the third quarter, according to a preliminary estimate released by Rosstat on 17 November. The result marked a notable slowdown from the second quarter’s 10.5% expansion.
Although a complete breakdown of components is not yet available, the moderation appears to have been mostly driven by markedly weaker growth in the retail and wholesale trade sector. In addition, growth momentum in the construction, manufacturing, and freight and passenger turnover sectors waned in Q3 compared to Q2, which will have further weighed on the overall result. More positively, mining and quarrying activity gained steam thanks to a healthier global oil market amid easing OPEC+ oil production cuts and higher crude prices.
Commenting on the result and GDP outlook for Q4 2021, Artem Zaigrin, chief economist at SOVA Capital, said:
“Russia’s economic recovery nearly stopped in Q3 2021 after surpassing Q4 2019 levels in Q2 2021 (+0.15% qoq s.a. in Q3 2021 vs. +2.1% qoq s.a. in Q2 2021, on our estimates). The non-working period and partial lockdowns should cool Russia’s Q4 2021 outlook, and we expect the country’s GDP growth to slow to 1.7% yoy in Q4 2021 due to these restrictions. On our estimates, the 11-day partial lockdown in Moscow, the Moscow region, St. Petersburg and other regions could cost Russia more than 0.3% of its FY 2021 GDP growth. As a result, we expect Russia’s FY 2021 GDP growth to be 3.8% yoy.”