Russia: Russia's economy in Q2 plunges to lowest level in six years
October 1, 2015
Russia’s economy in the second quarter contracted at the fastest pace since Q3 2009, which reflected a broad-based deterioration. According to more complete data published by the Federal State Statistics Service (Rosstat), GDP decreased 4.6% annually in Q2. The reading matched a contraction reported in a flash estimate and followed the 2.2% decline registered in the first quarter.
A detailed breakdown of data by type expenditure showed a broad-based deterioration. Total consumption declined 6.3% annually in Q2 (Q1: -6.4% year-on-year) due to an 8.7% decrease in private consumption (Q1:+9.0% yoy) and a flat growth in government spending (Q1: -0.1% yoy). In addition, gross fixed investment plunged 7.4% in Q2, which followed an 8.8% decrease in Q1. On the external front, exports of goods and services increased 1.4% in Q2 over the same period last year, which was down from a 4.5% rise in Q1. Imports plummeted 29.9% in the second quarter, which was faster than the 25.0% contraction tallied in Q1. The contribution to overall economic growth from net exports fell from 7.1 percentage points in Q1 to 6.8 percentage points in Q2.
Sequential data showed that GDP decreased a seasonally-adjusted 2.0% in Q2 over the previous quarter, which came in below the 1.6% contraction seen in Q1.The quarterly contraction was the steepest since Q1 2009.
Author: Ricardo Aceves, Senior Economist