Page 47 - RusRPTJan21

vaccination campaign could offset these effects.
After a rapid recovery in the summer, the Russian economy has weakened in recent months and the recovery in various industries has been mixed. ​In October, the situation deteriorated, especially in the processing industry and agriculture, while retail sales picked up. According to the forecast of the Russian Ministry of Economy, GDP contracted by 4.7% in October and by 3.6% year-on-year in January-October.
Retail sales picked up slightly in October after a couple of weaker months. New car sales were up 7% higher than a year earlier, but total sales were still 2% lower than a year ago. However, the pick-up in trade is likely to remain temporary, as it is estimated to reflect precautionary demand due to the weakening of the ruble and the darkening of the corona situation, as in the spring. The recovery of other services froze in October, e.g. with the tightening of interest rate restrictions.
Industrial production remained at its previous level in October as the main industries developed in different directions. Extractive production continued its slow recovery. However, year-on-year, it still contracted by 9% in October. Oil production is still curbed by a production restriction agreement between Russia and OPEC + countries, according to which Russia will not be able to increase its oil production from current levels this year. OPEC + countries have also discussed a possible extension of existing restrictions to early next year as the global coronary situation darkens. The development of the Russian processing industry, on the other hand, weakened markedly and production contracted by 4% year-on-year.
Agriculture also weighed on economic development. In October, agricultural production contracted for the first time in two years and was 7% lower than a year earlier. The contraction was largely due to lower yields of sunflower and sugar beet compared to last year’s record readings. In October, construction remained at the same level as it has been for the last couple of years. However, there are uncertainties in construction statistics and the data may be updated later.
47 ​RUSSIA Country Report​ January 2021 ​ ​www.intellinews.com