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Russia: GDP decelerates again in Q2, preliminary estimate shows

July 25, 2014

The Russian economy decelerated again in Q2, according to a preliminary estimate released by the Federal State Statistics Service (Rosstat) on 11 August. GDP rose 0.8% over the same quarter of last year, which was slightly below the 0.9% increase the economy tallied in the first quarter of the year. If confirmed, Q2’s reading would represent the lowest print since Q4 2009, when the economy contracted a sharp 2.6%.

Although a detailed breakdown of data is not released along with the preliminary estimate, some analysts point to declining private consumption as the main culprit of Q2’s deceleration. Low wage growth, prompted by paltry increases in productivity, are seen as the drivers behind the private consumption slowdown. Conversely, analysts see private investment rebounding in Q2, thus partially offsetting the decline in consumption.

FocusEconomics Consensus Forecast panelists expect the economy to expand 1.0% this year, which is down 0.2 percentage points from the previous month’s estimate. For 2015, the panel sees the economy growing 1.9%.


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Russia GDP Q2 2014 0

Note: Year-on-year changes in GDP in %.
Source: Federal State Statistics Service (Rosstat) and FocusEconomics Consensus Forecast.


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