Page 34 - RusRPTJul20

3.0​ ​Macro Economy 3.1 ​Macroeconomic overview
1Q20 GDP growth driven by agriculture, manufacturing, trade, finance.
The State Statistics Service has published the detailed breakdown of GDP statistics for 1Q20 by production category.
While the headline figure remained unchanged from the preliminary estimate of 1.6% y/y growth, the newly published breakdown shows that the most significant y/y growth was registered in agriculture (2.3%), manufacturing (3.6%), retail and wholesale trade (4.9%), and finance (9.8%). These segments combined added 1.6 pp to growth in 1Q20.
Negative dynamics were registered in transportation and storage (down 4.4% y/y) and mining and quarrying (down 0.5% y/y).
The monthly stats available for April and May indicate that sectors related to consumer demand and energy suffered the most from the quarantine measures and from the drop in demand for oil and gas (also owing to the lower oil production because of the OPEC+ deal). As a result, GDP could have contracted by as much as 8% in 2Q20. We estimate the full-year decline at 4% in 2020.
Russia’s GDP may fall by 5.2% in 2020, ​and rise around 3% in 2021, Moscow’s Higher School of Economics (HSE) said in a research note on June 6.. “According to our assessment, GDP may decline by 9.5% on the year in April–June, then by 6.9% and by 5.4% in July–September and October–December, respectively. A bounce-back will follow after the second quarter’s slump, and then the recovery will slow down,” the document read.
Sberbank CEO Gref told President Putin that current macro activity and the banking sector’s current state is good​. Sberbank improved its 2020 GDP forecast to -4.2-4.5% from -6-7%. Gref also noted improved macro activity with 100% recovery in most regions – measured by Sberbank’s internal rating – potentially signaling stronger CoR in 2Q20 from 3.0% (-0.8ppt attributed to macro adjustment).
34​ RUSSIA Country Report​ July 2020 ​ ​www.intellinews.com