GDP in Russia
Russia - GDP
GDP contracts only mildly in the first quarter
GDP declined at a softer pace of 0.7% year-on-year in the first quarter, improving from the 1.8% contraction logged in the fourth quarter of last year. Q1's reading marked the best result since Q1 2020. On a seasonally-adjusted quarter-on-quarter basis, GDP recorded a flat reading in Q1, up from the previous quarter's 0.2% decrease.
The upturn in annual terms reflected improvements in private consumption, fixed investment and exports compared to the previous period, chiefly thanks to easing lockdown restrictions and healthier external demand. Household spending fell at a more moderate rate of 2.8% year-on-year in the first quarter, which marked the best reading since Q1 2020 (Q4 2020: -5.7% yoy). Moreover, fixed investment fell at a slower pace of 0.4% in Q1, easing from the 2.1% contraction recorded in the previous quarter. However, government consumption grew at the slowest pace in over five years, expanding 0.3% in the quarter (Q4 2020: +4.1% yoy), thus weighing somewhat on the overall outturn.
On the external front, exports of goods and services declined at a milder rate of 2.4% year-on-year in the first quarter (Q4 2020: -6.5% yoy). Similarly, imports of goods and services fell at a softer pace of 2.1% in Q1 (Q4 2020: -5.5% yoy), marking the best reading since Q1 2020.
Looking ahead, GDP is expected to rebound this year, as the lifting of restrictions at home thanks to the vaccine rollout revives domestic demand. Similarly, global vaccination campaigns should rekindle foreign demand, which, coupled with a healthier global oil market overall, bodes well for the external sector.
Commenting on the outlook, Artem Zaigrin, chief economist at SOVA Capital, struck a rather optimistic tone:
“Russia’s 4M21 performance has led us to upgrade our Q2 2021 and 2021 forecasts in May to respective growths of 8.5% yoy and 3.4% yoy. We expect the recovery momentum to moderate as the economy reaches its potential
(both in the energy and non-energy sectors) closer to year-end 2021, and we forecast GDP growth of 2.0% yoy in 2022.”
FocusEconomics Consensus Forecast panelists see GDP increasing 3.2% in 2021, which is unchanged from last month’s forecast. For 2022, the economy is seen expanding 2.6%.
Russia - GDP Data
|Economic Growth (GDP, annual variation in %)||-2.0||0.2||1.8||2.5||1.3|
5 years of economic forecasts for more than 30 economic indicators.
Russia GDP Chart
Source: Russian Federal State Statistics Service (Rosstat) and FocusEconomics calculations.
|Bond Yield||6.23||0.13 %||Dec 30|
|Exchange Rate||62.03||-0.12 %||Dec 30|
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July 23, 2021
Industrial production grew 10.4% year-on-year in June (May: +12.3% yoy).
July 23, 2021
At its meeting on 23 July, the Board of Directors of the Central Bank of the Russian Federation (CBR) raised the key interest rate by 100 basis points to 6.50%.
July 15, 2021
Merchandise exports shot up 65.8% over the same month last year in May (April: +47.7% year-on-year).
July 8, 2021
Consumer prices rose 0.69% in June over the previous month, broadly in line with May's 0.74% increase.
July 6, 2021
The IHS Markit Services Purchasing Managers’ Index (PMI) came in at 56.5 in June, down from May's 57.5.