Page 7 - RusRPTJan21

Industrial production (IP) rebounded surprisingly in November to 2.6% y/y vs. 5.5% y/y in October and 3.6% y/y in September. Industry-wise, the most significant improvement occurred in manufacturing (+1.1% y/y vs. -3.7% y/y in October). Mining and quarrying improved (-6.8% y/y vs. -8.6% y/y in October) thanks to the better performance of the non-energy sector (coal, metal ores and other minerals).
A special feature of this year is the OPEC + agreement between Russia and other oil-producing countries, which limits crude oil production so that the world market price of its oil does not fall too much. As a result, mining operations in Russia have contracted very sharply, with an annual change of −12% in the third quarter.
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 and failed to recover in the following months.
Agriculture also weighed on economic development putting in its first contraction two years in October when it 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.
7 ​RUSSIA Country Report​ January 2021 ​ ​www.intellinews.com