Russia's GDP contracted 0.4% in March, fell 2.9% y-o-y - VEB
MOSCOW. April 23 (Interfax) - Russia's GDP, adjusted for seasonal and calendar factors, contracted by 0.4% in March compared to the previous month, as it did in February after falling 1.5% in January, analysts at VEB, led by the state bank's chief economist Andrei Klepach, have estimated.
Seasonally adjusted, retail sales fell 1.2% in March and the construction sector contracted by 1.3%. Meanwhile, industrial production, which showed growth for the first time since the start of the year, and the transport sector had a positive impact on economic growth.
GDP fell 2.9% year-on-year in March after declining 0.3% in February, VEB estimates.
The economic slump accelerated primarily due to the dynamics of net taxes, as the positive impact of the surge in crude oil and oil product exports in February faded. In addition, the negative contribution of the construction sector increased and there was a slowdown in the financial sector, while the decline of industrial production slowed in March.
Quarterly GDP fell for the first time since 2009. VEB estimates GDP in the first quarter of 2015 contracted by 1.5% year-on-year and by 1.8% compared to the fourth quarter of 2014. The decline of trade and manufacturing made the biggest contribution to the drop.
However, some signs of stabilization on the forex and money markets began to emerge in March, VEB said, citing Klepach. Net capital outflow decreased to $3 billion in March from $22 billion in February, the ruble began to strengthen and inflation slowed.
"However, we don't yet believe that these trends are stable. A turnaround of the economic dynamics toward recovery can be expected more in the second half of the year," Klepach said.
He noted that the decline in consumer activity is gaining momentum, the drop in real household incomes accelerated, while the savings rate, VEB estimates, rose to double-digit figures in March for the first time since last summer.
"The dynamic of investment in the first quarter turned out to be somewhat better than we expected. In March there was even slight growth compared to the previous month. However, we still believe that the decline of investment will accelerate in the coming months. The continued slump in construction and engineering point to the existing negative potential," Klepach said.
VEB analysts reviewed the previously published GDP estimate for February 2015 and significantly reduced the estimated scale of the economic contraction in the month. They now estimate that Russia's GDP in February fell by 0.3% year-on-year and 0.4% from the previous month, rather than by respectively 2.1% and 0.6%.
This revision is due primarily to new data from the Federal Customs Service that showed a spike in the growth of oil and oil product exports that significantly exceeded preliminary figures from the Energy Ministry on which the previous estimate was based, VEB said.
This month the Federal Statistics Service revised its real GDP growth figures for the first quarter of 2014. This reduced the estimated year-on-year decline in the first months of 2015. However, the revision increased the estimated drop in GDP in January compared to the previous month to 1.5% from 1.2%.
