Page 42 - RusRPTOct20

3.0​ ​Macro Economy 3.1 ​Macroeconomic overview
Rosstat revised estimate of GDP growth in 2Q20 show the Russian economy contracted 8.0% y/y in 2Q20, an improvement from the previous estimate of an 8.5% contraction​. Industrial production, retail and wholesale trade, and transportation contributed the most to the decline. GDP was down 3.4% y/y in 1H20. We note again that the decline in GDP in 2Q20 was less sharp than the drop in basic sector output, which was down 9.7% y/y. Some industries that are not included in the basic sector data, such as the financial sector and the defense industry, were less affected by the lockdowns and even managed to post growth. Others, such as IT and communication, education and real estate, saw a less steep decline.
Services and transportation led the decline in the second quarter​.The biggest laggard was hotels and the public catering sector (-56.9% y/y) followed by services to households and population (-46% and -28.6% y/y), culture and sports (-28% y/y), transportation (-19.3% y/y) and retail trade (-12.7% y/y).
Cuts in production and exports in Russian oil and gas sector due to the OPEC+ deal and the effects of warm winter pushed value-added output in the mining sector in 2Q20 down by 12.8% y/y.
Financials, public management, and agriculture were the only sectors to post growth in 2Q20. The sectors’ showed 6.1% y/y, 2.6% y/y and 0.4% y/y growth, respectively.
The slide in output in other key segments of the economy during the same period was fairly moderate: in construction, value-added output fell by just 1.7% y/y, in utilities – by 3.9% y/y and in the manufacturing industry – by 7.9% y/y.
In 1H20, Russia’s GDP fell 3.4% y/y, up vs previous assessment of -3.6% y/y​. Provided that the economic situation remains stable in the remaining months of 2020, the latest data sets a good base for a smaller decline in annual GDP than currently expected by consensus, the government and the CBR (estimates vary between -3.9% y/y and -4.5% y/y).
42 ​RUSSIA Country Report​ October 2020 ​ ​www.intellinews.com