Russia: Industrial production gains traction in February
March 17, 2020
Industrial output jumped 3.3% year-on-year in February, accelerating from January’s 1.1% increase and marking the strongest expansion since September 2019.
A rebound in mining and quarrying activity and sturdier output growth in the all-important manufacturing sector led the overall upturn in the second month of this year. Moreover, electricity, gas, steam and air conditioning supply was largely stable in February, compared to a marked contraction in January. That said, water supply and sewage activities slipped into negative territory in the month, thus weighing on the overall reading.
On a monthly basis, industrial production rose 0.5% in seasonally- and calendar-adjusted terms, contrasting January’s 0.8% decrease. Meanwhile, annual average growth in industrial production ticked down from 2.3% in January to 2.3% in February.
Despite February’s upturn, the medium-term industrial activity outlook in Russia appears increasingly uncertain due growing risks of the fallout from the fast-spreading coronavirus pandemic. Commenting on the outlook, Dmitry Dolgin, chief Russia economist at ING, noted:
“The longer-term expectations, however, for the industrial trend in Russia will largely depend on the shape of the global growth trend, which so far appears highly uncertain, as well as on the mood in the locally-focused sectors not directly dependent on the state. While previously we were looking to upgrade our 2.7% yoy industrial output growth forecast for 2020, now the balance of risks to those forecasts are tilted more to the downside.”
Author: Almanas Stanapedis, Economist