Russia: Contraction in industrial production is less pronounced in June
July 15, 2015
Russia’s economic woes moderated with the latest news regarding industrial production. According to the Federal State Statistics Service (Rosstat), industrial production contracted 4.8% year-on-year in June, which came in slightly above the 5.5% decrease registered in May. May’s result had marked the steepest fall since October 2009. June’s print was slightly worse than the 4.0% decrease the markets had expected.
June’s softer contraction stemmed from a slower decrease in manufacturing output, which decreased 6.6% annually (May: -8.3% year-on-year). In addition, the production of electricity, gas and water fell 1.0%, less pronounced than the 1.4% decrease tallied in May. Meanwhile, the pace of contraction in mining and quarrying in June was similar as in May (-0.9% yoy).
Sequential data confirm the mild improvement suggested by the annual data. Industrial production fell a seasonally-adjusted 0.1% in June, which came in above the 0.6% contraction tallied in May.
The overall trend, however, continued to suggest that Russia’s industrial production is losing strength rapidly. The annual average growth in industrial output declined zero in May to minus 0.5%, which marked the first negative reading since April 2010.
Author: Ricardo Aceves, Senior Economist