Russian GDP performance in October reveals less than desirable tendencies

Today’s edition of Kommersant writes about the report published by the Russian Ministry of Economy, indicating a lukewarm performance of Russia’s GDP in October. Seasonally adjusted GDP growth in October was close to zero (0.1 percent), down from a 0.4 percent growth in September.

Industrial output in October declined by 0.7 percent, with only two of its components registering growth: chemical industry and machinery manufacturing. In addition to the decline in industrial output, the report noted a negative tendency in consumer spending: with the reduction of average real income by 1.3 percent in October, the retail sector discontinued its growth. The report attributes this to economic uncertainty and expectation of the second wave of the economic crisis, supporting its conclusions with the consumer confidence data provided by the Russian Statistical Bureau. Construction and agriculture balanced the negative tendencies in the rest of the economy, with construction rebounding from a September slump of 1.3 percent to a 3.1 percent growth in October.

The Russian balance of trade in October was USD 13.1 billion, significantly lower than USD 17.1 billion registered in September. On top of that, the increase in Russian exports during the first nine months of 2012 was supported by growing prices, rather than increased export volumes (which actually fell by 0.3 percent during the period). On the other hand, the growth of imports was a consequence of growing import volumes (4.8 percent during the first nine months of 2012), while the prices of imported products actually fell by 3.4 percent.

Capital investments provided a significant support to the GDP performance in October, growing by as much as 14.4 percent compared to September. However, this growth was realized against the revised figures for September, which indicated a much lower growth compared to August than previously expected (0.6 percent instead of 8.4 percent).

 

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