Page 37 - RusRPTFeb21

expectations (-3.9% y/y) by contracting 2.9% y/y (-2.5% y/y in 4Q20 vs. -4.8% y/y in 3Q20 and -6.7% y/y in 2Q20).
The mineral extraction segment remained depressed due to OPEC+ cuts (-8.5% y/y in December 2020 vs. -7.5% y/y in November 2020 and -9.2% y/y in October 2020) while the manufacturing sector continued to post gains. The sector was up 4.4% y/y in December 2020 after increasing 2.9% y/y in November 2020 and dropping 2.8% y/y in October 2020. The improvement came from the durable goods industries, machinery and equipment, as well as from medical production (+82% y/y), the strong performance of, which could be due to vaccine production. Electricity, gas, steam and AC returned to growth (+4.7% y/y in December 2020 vs. -2.8% y/y in November 2020), while water performed well (+6.5% y/y in December 2020 vs. +4.7% y/y in November 2020 and +3% y/y in October 2020).
The construction sector did not see a meaningful increase (+0.9% y/y in December 2020 vs. +0.6% y/y in November 2020), and the FY20 results for the sector were up 0.1% y/y. Agriculture performed well in 2020 thanks to livestock and poultry production and cereals crop production, which compensated for the poor harvest of other products (e.g. sugar beetroot). The transportation sector also saw an improvement, narrowing its contraction from 3.4-3.6% y/y in September-October 2020 to 1.7% y/y in November 2020 and 1.3% y/y in December 2020 thanks to higher volumes of railway and automobile transportation.
The worsening COVID-19 situation did not derail the recovery in consumption. Despite the difficult epidemiological situation, consumer indicators were marginally weaker. Retail sales dipped 3.6% y/y in December 2020 vs. a drop of 3.1% y/y in November 2020. The non-food category was the main drag (-2.6% y/y in December 2020 vs. -1.7% y/y in November 2020), while the demand for food eased (-4.5% y/y in December 2020 vs. -4.3% y/y in November 2020). Overall, retail sales fell 4.1% y/y in 2020. The contraction in services consumption eased from 13.7% y/y in November 2020 to 12.5% y/y in December 2020, with the FY20 decline at 17.3% y/y. On the income side, the contraction in real disposable income narrowed to 1.7% y/y in 4Q20, meaning an average contraction of 3.5% y/y for 2020. Real wages added 0.2% y/y, keeping the 11M20 increase at 2.2% y/y. The absence of any significant restrictions supported employment, with the unemployment rate falling to 5.8% on an SA basis vs. 6% in November 2020 and 6.5% in September 2020.
37 ​RUSSIA Country Report​ February 2021 ​ ​www.intellinews.com