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March 23, 2018 www.intellinews.com I Page 11
Russia puts in a mixed set of economic results in February
bne IntelliNews
Russia put in a mixed set of economic results in February. While unemployment fell to a record low and real disposable income jumped unexpectedly, overall retail sales fell, which was a surprise.
Russian activity figures for February were generally a bit weaker than expected, but even so it looks like the economy is on course to grow by about 1.5%-1.8% y/y in the first quarter, up from about 1.0% y/y in the final quarter of last year.
Industrial production slowed somewhat in February, retreating to a 1.5% y/y expansion, down from 2.9% y/y in January, which was below the consensus expectation of 2.1% y/y, according to Capital Economics.
“The slowdown was driven mainly by the manufacturing sector. That tallies with some of the surveys, notably the manufacturing PMI, which also weakened last month,” the consultants said in a note.
Manufacturing has been on and off, and companies are blowing in the winds of geopolitics, the ruble exchange rate and oil prices, all of which have affected retail turnover.
In other sectors, growth in the agricultural sector picked up to 2.6% y/y from 2.5% y/y, but output in the construction sector fell by 0.2% y/y, following an expansion of 0.2% y/y in January.
But the surprise was in retail, which weakened to a seven-month low of 1.8% y/y, down from 2.8% y/y in January and well below consensus expectations of 3.0% y/y.
“It’s not quite clear what’s behind the slowdown in the retail sector, but our sense is that it should be temporary. Other indicators such as motor vehicle sales point to strong consumer spending last month,” Capital Economics said in a note.
Retail sales had been recovering all last year and consumer credit has exploded.
Russia income vs retail sales