19 Sep 2019 15:36

Russian GDP grew 1.6% in August, 1.1% in 8M - Econ Ministry

MOSCOW. Sept 19 (Interfax) - Russian GDP growth slowed to 1.6% in August from 1.8% in July, the Russian Economic Development Ministry said in a review.

The July figure was adjusted from an initial estimate of 1.7%. The economy grew 1% in June and 0.3% in May - those figures were also adjusted, from 0.8% and 0.2%, respectively.

GDP grew an estimated 1.1% in January-August.

"Economic growth continued to recover in August following a weak dynamic in the first half of the year," the ministry said.

"As in July, industrial production (up 0.6 p.p.) and agriculture (0.1 p.p.) were upsides for economic growth. Rates of growth in mineral resource production (3.1% YoY) and manufacturing (2.7% YoY) remained roughly at last year's levels, while growth was observed in electric power and water supply. Slowing growth in agriculture in August to 2.8% year-on-year (after 5.9% YoY in July) was of a "technical character" and took place due to an earlier start to the harvesting season compared with the previous year," the ministry said.

"At the same time, non-tradable sectors (retail trade, construction, transport) continued to post weak dynamics in August. Growth in retail trade turnover in August slowed to 0.8% YoY after 1.1% YoY amid declining trends in food and non-food retail. Growth in construction remains near zero (0.3% YoY in August). Transport cargo turnover is demonstrating negative dynamics for the second month in a row (-0.7% YoY)," the report said.

The Economic Development Ministry at the end of August left its forecast for GDP growth in 2019 unchanged at 1.3%, but lowered its 2020 forecast to 1.7% from 2.0%. The 2021 GDP growth forecast is still 3.1%.

The Central Bank on September 6 lowered its GDP growth forecast from 1-1.5% to 0.8-1.3% in 2019, from 1.8-2.3% to 1.5-2% in 2020, and from 2-3% to 1.5-2.5% in 2021.

Analysts told Interfax in a consensus forecast at the end of August that they thought GDP would grow 1.1% in 2019 and 1.9% in 2020.