Page 24 - RusRPTDec18

3.0 Macro Economy 3.1 Macroeconomic overview
Russia’s growth slows to 1.3% in the third quarter due to a high base effect from last year’s record breaking harvest
Russian GDP growth slowed to 1.3% in the third quarter of 2018 y/y, down from 1.9% growth the previous quarter y/y due to a high base effect from last year’s record breaking harvest, according to preliminary data from Rosstat released on November 13.
Rosstat’s results confirm previously published calculations by the Ministry of Economic Development.
The Ministry of Economic Development explained the slowdown in economic growth in the third quarter as due to the comparison with a high base of agricultural production last year. This year’s harvest is expected to be a decent 106mn tonnes of grain, but will be nowhere near the all time high harvest of 133mn tonnes of grain brought in in 2017. The difference cost GDP growth 0.5pp of growth in the national statistics, according to the Economics Ministry.
Nevertheless, even without the base affect, Russia’s economy continues to underperform and the Economics Ministry has downgraded its forecast twice this year already from 2.1% at the start of the year to 1.8% now.
In general, in the first 9 months of 2018, the Ministry of Economic Development estimated the growth of the economy at 1.6%. In September and August, GDP grew at an annualized rate of 1.1%.
The basic version of the macro-forecast by the Ministry of Economic Development suggests GDP growth in 2018 by 1.8% after 1.55% in 2017. Economic Development Minister Maxim Oreshkin said that economic growth may deviate from the official forecast even further, and called the range between 1.5% and 2%. The Central Bank believes that the Russian economy cannot grow faster than 1.5-2% per year.
24 RUSSIA Country Report December 2018 www.intellinews.com