Page 33 - RusRPTDec20

3.0​ ​Macro Economy https://rosstat.gov.ru/bgd/free/B04_03/IssWWW.exe/Stg/d05/185.htm
Structure of GDP
3.1 ​Macroeconomic overview
GDP fell 3.6% y/y in 3Q20, in line with the 3.4% drop in basic sector output during the quarter​. This marked a significant improvement on 2Q20, when GDP sank 8%.
After seasonal adjustments, the economy enjoyed a strong q/q bounce in 3Q20 that was even stronger than we had expected. Analysts currently project a 4.5% contraction for the full year.
The output of Russia's basic sectors declined by 3.0% y/y in September, the same as in August. ​The State Statistics Service has also revised upward its basic sector data for previous months, mostly due to its previous revision of industrial production data.
The breakdown shows a mixed picture, as there was a deterioration in the y/y performance of industrial production, retail trade and agriculture, while construction, transportation, paid services and wholesale trade continued to improve. All in all, the data indicates that the recovery was losing steam in September. It should continue to slow in 4Q20 amid the second wave of Covid-19 and high unemployment of 6.3%.
CBR Governor Elvira Nabiullina presented the principal guidelines for monetary policy in 2021-23 to the State Duma on November 25. ​The most important points are as follows:
● The uncertainty around when lockdowns will fully end is weighing on Russia’s long-term economic outlook.
● In the base case, CBR sees GDP growth at 3-4% y/y in 2021, 2.5-3.5% y/y in 2022 and 2-3% y/y in 2023. The economy should
reach pre-crisis levels by mid-2022 thanks to the decisions taken by the government and CBR, as well as an accommodative monetary policy.
● The full impact of the 200bps in rate cuts this year could be seen in three to six quarters. As a result, these actions should offset the negative impact from the fading fiscal stimulus. CBR expects to keep the key rate below the neutral level in 2021; however, if disinflationary pressures remain high after the pandemic, the policy could remain accommodative for longer.
33 ​RUSSIA Country Report​ December 2020 www.intellinews.com