Russian economy shows marginal, uneven growth in September
Although some sectors of Russia’s economy still showed moderate growth last month, the recovery was slower than in the summer. Primary production, agriculture and service sector contributed to September’s economic development.
Russia’s economy recovered slowly in September amid a new decrease of real disposable incomes, reports bneIntelliNews citing the Bank of Finland Institute for Economies in Transition. The country’s service sector and primary production became main drivers of economic development, but even these sectors recovered at a slower pace in September compared to previous months, while the development of other main industries weakened.
As for consumer-driven sectors, retail trade lost 3% compared to a year earlier. However, positive dynamics was registered in the automotive sector, which showed a 3% increase in new car sales compared to September 2019. The recovery continued in other service sectors but slowed from previous months. For example, service production was by 12% lower last month than a year earlier.
A slowdown in the processing industry resulted in a weaker recovery of industrial production in September. Extractive industries continued growth at a more moderate pace. Industrial production statistics for 2019 and 2019 were revised upwards last month. According to new data, the production contracted by only 3% year on year in the first nine months of 2019, which was almost 2% less than previously estimated. A decline in production of machinery, equipment and means of transport appeared to be more moderate. The revision is expected to affect GDP data positively. The Russian Ministry of Economy expects Russia’s GDP to contract by 3,8% in July-September and by 3,5% year on year in January-September.
Agricultural production continued to grow in September, as throughout this year, but growth slowed to 1%, says bneIntelliNews. While general construction output remained unchanged compared to a year earlier, housing construction has become a driver of the national construction industry in recent months. After a sharp decline in the spring, housing construction increased by 6% y/y in July-September thanks to a boom in new housing purchases driven by the state-backed mortgage subsidy programme.
In the labour market, the unemployment rate amounted to 6,3% after a marginal fall in unemployment in September. At the same time, real wage growth stalled in August, and household real disposable income fell by 5% year on year in July-September. Besides, revenue statistics for the whole of 2020 were revised downwards in September. The purchasing power of Russian households is currently lower than a decade earlier.