3 Jun 2021 15:55

Russian GDP growth in April tops 10%, Econ Ministry could revise annual forecast in June - minister

ST. PETERSBURG. June 3 (Interfax) - Russian annual GDP growth in April exceeded 10% compared to the decline in April of last year, the recovery of the economy is slightly ahead of expectations, and the annual forecast for 2021 could be revised in July, Economic Development Minister Maxim Reshetnikov told reporters on the sidelines of the St. Petersburg International Economic Forum (SPIEF).

The economy will fully recover from the crisis and reach the average level of Q4 2019 in June-July, the minister said.

"Annual growth in April is expectedly high - a double-digit GDP growth rate against the background of last year's collapse," he said regarding the Economic Development Ministry's GDP growth estimate for April.

"But comparing current trends with last year is a bit meaningless for obvious reasons. We use two values as a reference point - the annual average of 2019 GDP and the average for Q4 2019. If you compare it to the 2019 average, by and large we have already recovered in April. If we take Q4, we are at minus 0.9 p.p. For May, it is still difficult to estimate thus far, because there were non-working days, and they will have some impact. So if we are speaking about a full recovery relative to Q4 2019 - we're talking about June-July," the minister said about the Russian economy reaching pre-crisis levels.

"That's two to three months earlier than we anticipated, so the recovery is really coming along, visibly ahead of schedule. If these trends hold in May and June, we'll have reason to raise the forecast for 2021. We will do that in July," Reshetnikov said when asked about the ministry's forecast for annual GDP growth in Russia, which is now 2.9%.

"At the same time, what's more important to us is what will happen to the trajectory, so special attention is paid to investment and consumer demand. We are now concerned about the unobserved part of the income of the population - everything is fine with salaries and social payments, but entrepreneurial and other unrecorded income - there are questions about this indicator," the minister said.