Russia: Rosstat revises Q3 growth up slightly
December 29, 2018
A comprehensive estimate of national accounts data released by Rosstat on 29 December revealed that the Russian economy grew 1.5% over the same period of the previous year in the third quarter of 2018, slightly above the preliminary reading of a 1.3% expansion. Despite the upward revision, the recovery still lost steam from Q2’s 1.9% growth. The deceleration was driven by weakening consumption dynamics as well as a poor performance by the agricultural sector which was hit with unfavorable weather and a late harvest.
Household consumption growth slid to 2.1% in the third quarter, the worst result since Q1 2017 (Q2 2018: +2.6% year-on-year). Plunging consumer sentiment after the government announced an unpopular hike in the retirement age and the VAT tax likely plagued household spending. In addition, government spending fell 0.3%, contrasting the second quarter’s 0.6% increase, as the government pursues a prudent fiscal policy. However, fixed investment growth was a bright spot in the national accounts data, with investment rising 2.8%, notably above Q2’s 1.0% increase.
Dynamics in the external sector were also lackluster in the third quarter. Export growth fell from a robust 7.3% in Q2 to 4.5% in Q3, weighed on by slower global trade and constrained oil output. Meanwhile, imports stuttered recording zero growth, reflecting a weak domestic economy.
Along with detailed third quarter data, Rosstat also released revised annual GDP figures in December. Notably, Rosstat revised 2016’s figure from a 0.2% contraction to a 0.3% expansion. Similarly, 2017’s growth was revised up a notch revealing that the economy was on a slightly firmer footing than previously thought.