Адрес:
6 Presnenskaya Emb., 123112 Moscow Russia
Главная \ News \ Q1 2018 Economic review: Russia

Q1 2018 Economic review: Russia

The period was characterized by a modest growth in retail revenue and turnover, the contribution of the consumer sector to GDP growth was the highest in comparison with other sectors. Despite the recovery of the consumption sector, it is not currently in a sufficiently strong position so as to drive the Russian economy forward.

Despite a slow start in Q1 and a new round of sanctions, economic development forecasts in Russia remain positive. Oxford Economics predicts GDP growth of 1.8% in the upcoming year. The growth in the official forecast of the Ministry of Economic Development is expected 2.1% by the end of the year. Moreover, the Ministry has improved expectations for oil prices, household incomes and increased investment. Authorities predicts the positive dynamics of real disposable income of the population – now we expect growth by 3.8% instead of 2.3% (in 2017, a decline of 0.8% was recorded).

The forecast for investment growth was improved to 4.8% from 4.7% in April, 2018. The retail trade turnover will also grow more than expected – by 3.3% instead of 2.9% by the end of the year.

Low inflation continues to represent a critical factor in the health of the Russian economy. Immediately following the annual calculation in February, inflation stood at 2.2%, the lowest rate in contemporary Russian history. In Q1 2018 the inflation rate was 0.81%. It is expected that in Q2, Q3, and Q4 inflation will increase slightly.

Despite the recovery of the consumption sector, it is not currently in a sufficiently strong position so as to drive the Russian economy forward. The return of a consumption driven behavior model has not accordingly lead to a multiplier effect. Mortgage lending and the housing market remain the main drivers of growth. There is a derivative from construction industry to increase in consumer demand for DIY, decoration, furniture, interior solutions, and these market trends can become attractive for retailers. Moreover, the implementation of the renovation program in Moscow will be demand multiplier in the one of the field of the consumption market.

The 0.5 p.p. decrease in the key interest rate in March, as well as the expected future decrease in the key rate later on in 2018 have both contributed to positive economic forecasts. However, the recent Central Bank announcement regarding volatility in the exchange rate could lead to greater lending within the Russian economy. Lending recovered during in H2 2017. However, at the start of 2018 the credit expansion rate decreased. Within the retail market, lending has been frozen since 2017. Potential limits on the import of consumer products from the United States could further contribute to the depression of retail markets.

Sources: Verve Way, the Ministry of Economic Development, Oxford Economics

Tegs russian economic
News
The international rating agency S&P has approved a long-term rating of Russia for liabilities in foreign currency at BBB- with a stable outlook.
The unemployment rate in Russian regions at the end of Q2 2020 increased by an average of 30% compared to the same period last year, writes Kommersant, citing Rosstat.
The share of unprofitable organizations in the Russian Federation in January-May 2020 increased by 3.8 pp compared to the same period last year and amounted to 36%, Rosstat reports.
Inflation in Russia in the period from June 30 to July 6 jumped to 0.3% after zero value reached a week earlier, according to Rosstat data.
Rosstat published the full structure of all consumer income and expenses for Q2 2020.
MARKET INDICATORS
THE RUSSIAN TOURIST MARKET
THE RUSSIAN TOURIST MARKET
Review of the Russian Coffee Market
Review of the Russian Coffee Market
Review of the Russian Meat Market
Review of the Russian Meat Market
Review of the Russian Fruit and Vegetables Market
Review of the Russian Fruit and Vegetables Market
Контакты
6 Presnenskaya Emb., 123112 Moscow Russia
Get in touch