Russia: Growth gains momentum in Q1
A second estimate of national accounts data released by Rosstat on 18 June confirmed that the economic recovery gained steam in the first quarter, following a sharp slowdown at the end of last year. GDP rose 1.3% over the same quarter last year, which was unchanged from the preliminary estimate released on 16 May. Q1’s print was above Q4 2017’s 0.9% expansion.
A breakdown by industry revealed that rebounds in the manufacturing, mining, and provision of electricity, gas and steam and air conditioning sectors drove the acceleration in Q1. Firmer commodity prices likely supported the mining sector, while looser monetary policy is expected to have buttressed momentum more generally. Conversely, growth in the wholesale and retail trade, transportation, hotels and restaurants, information and communication, and healthcare sectors eased in the quarter.
Moving forward, the recovery is expected to pick up on the back of higher oil prices, stronger private consumption, and looser monetary conditions. Developments in the energy sector remain critical to Russia’s outlook, and some market analysts are expecting that OPEC and Russia may decide at their 22 June meeting to increase oil production, which would provide an additional boost to the recovery.