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Russia: GDP slowdown confirmed in Q2

September 17, 2014

The Russian economy decelerated slightly in the second quarter, according to more complete data released by the Federal State Statistics Service (Rosstat). GDP rose 0.8% over the same quarter of last year, which matched the preliminary estimate and was slightly below the 0.9% increase the economy tallied in the first quarter of the year. The reading represented the lowest print since Q4 2009, when the economy contracted a sharp 2.6%.

Q2’s result showed that services decelerated notably compared to the previous quarter, growing a mild 0.4% annually in Q2, which came in well below the 1.5% expansion tallied in the previous quarter. Conversely, agriculture bounced in the second quarter and expanded 1.0%, which contrasted the 0.8% contraction observed in Q1. In addition, the industrial sector increased 2.2% over the same quarter last year. The reading marked an improvement over the 0.5% expansion registered in Q1.

A quarter-on-quarter comparison showed that GDP increased 0.25% in seasonally-adjusted terms in Q2, which came in above the 0.07% rise registered in Q1.

The Ministry of Economic Development slashed its growth forecast from the previous 1.0% to the current 0.5%. For 2015, the Ministry also halved its growth forecasts from 2.0% to 1.0%. The Ministry cited the sanctions imposed by Western economies to Russia as the main cause for the downgrade in growth. FocusEconomics Consensus Forecast panelists expect the economy to expand 0.3% this year, which is down 0.1 percentage points from the previous month’s estimate. For 2015, the panel sees the economy growing 1.4%.


Author:, Senior Economist

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Russia GDP Q2 2014

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


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