Page 9 - RusRPTJul21

Recession, the sector has not experienced growth for years. The real estate sector with its various sizeable activities, in turn, has grown steadily. It also weathered 2020 rather well,” said BOFIT.
Amongst the worst affected sectors were services as shops, cafes and restaurants were forced to close during the lockdowns in the second quarter of last year. However, once the lockdown was lifted the sector began to recover and the most recent service PMI has shown a very strong recovery in the last two months.
“Various services to firms and households, largely provided by private firms, experienced a considerable GVA volume drop as a whole during the past two years. These services have seen no sign of recovery, and their collective GVA volume remains at the 2014 level. Separately, information and communications branches, in contrast, have grown almost steadily at a fairly good pace, with only a mild dip during the Covid Recession,” BOFIT said.
Banking has been a big winner from the crisis and is currently earning its highest profits in five years. Banks extended their bull run by posting $3bn of profits in May. Bank profits are being fuelled by the rebound in economic activity and the concurrent growth in corporate profits, which are also the highest in five years. That has allowed banks to clear non-performing loans (NLPs) from their books and release capital put aside to provision for these problem loans that is added to the bottom line.
“The financial sector has been Russia’s fastest-growing category, experiencing especially high growth in each of the past three years. Part of this growth can reflect efficiency gains from embracing digital technology. In addition, the growth in bank lending last year was accelerated by stimulus efforts on the part of the government and the central bank,” BOFIT said.
Public administration (civil and military administration), which has enjoyed growth for most of the past decade, got a further kick last year from government budget spending increases, even if most public administration jobs are not on the front lines in the fight against COVID.
The healthcare field has long experienced growth, though it is not up by more than 15 % from 2011, reports BOFIT.
“Measured in GVA volume, growth in the healthcare field came to a halt last year. This may reflect disruptions in the provision of other healthcare services due to the struggle with covid. Developments in the education branch have been notably uneven, with an overall decline for nearly three years. Thus, the branch’s activity measured in GVA volume is slightly lower than in 2011,” concluded BOFIT.
9 RUSSIA Country Report July 2021 www.intellinews.com