Russia: Decline in industrial output softens in July
Industrial production fell 8.0% year-on-year in July (June: -9.4% yoy). The improvement came despite the adverse calendar effect, and suggests that fiscal stimulus measures are having the desired impact on activity.
Looking at the breakdown, July’s smaller drop was chiefly driven by a softer fall in manufacturing production. In contrast, both mining and quarrying output and water supply fell more sharply at the outset of Q3.
On a seasonally-adjusted monthly basis, industrial output rose 1.5% in July (June: -0.1% mom), the best result since May 2018. However, the trend pointed down, with the annual average variation of industrial production coming in at minus 1.4% in July, down from June’s minus 0.5% reading.
Commenting on the outlook, Dmitry Dolgin, chief Russia economist at ING, said:
“In the near term the industrial output should be supported by the relaxation of the OPEC+ restrictions since August, and the continuing fiscal stimulus. Meanwhile, in the longer run, the fiscal support factor is likely to fade, which will make the question of overall recovery in demand more acute.”