Russia: GDP expands at slowest pace since 2009 recession
January 31, 2014
According to the flash estimate published by the Federal State Statistics Service (Rosstat) on 31 January, GDP grew 1.3% in the full year 2013, which was well below the 3.4% expansion recorded in 2012 and represented the slowest reading since 2009. The result came in slightly under the 1.5% expansion the market had expected.
The annual result reflected a deterioration in domestic demand, while the external sector improved over the previous year. Private consumption increased 4.7% in the full year 2013 (2012: +7.9%), whereas fixed investment contracted 0.3%, which was down from a 6.4% expansion recorded in the previous year.
Meanwhile, the external sector's contribution to overall growth increased compared to the previous year, as exports improved and imports moderated. Exports expanded 3.8% in 2013 (2012: +1.4%), while imports increased 5.9% (2012: +8.8%).
At the sector level, agriculture expanded 3.2%, which contrasted the 2.7% drop recorded in 2012 when a summer heat-wave and subsequent drought swept affected the country's agricultural output. That said, this year's harvest was also impaired by flooding in September, which affected the main agricultural regions. All of the other sectors fared worse compared to the previous year. Industry slowed from a 2.1% increase in 2012 to a 0.6% expansion in 2013 and services decelerated from a 4.9% rise in 2012 to a 1.8% increase in 2013.
Based on full-year figures, the economy grew 1.2% in Q4 2013 over the same quarter of the previous year, which, if confirmed, is in line with the readings recorded in the two previous quarters.
The government expects the economy to expand 2.5% in 2014. FocusEconomics Consensus Forecast panelists expect GDP to grow 2.3% in 2014, which is down 0.2 percentage points from last month's forecast. Next year, the panel sees the economy growing 2.6%.
Author: Armando Ciccarelli, Head of Data Solutions