Page 43 - RusRPTOct20

Basic sector output was down 5.9% y-o-y in July, marking a significant improvement from the figures for June (-8.1%) and May (-11.6%). ​In seasonally adjusted terms, basic sector output improved m-o-m in both in June and July.
Demand for goods and services has recovered rapidly, boosting the economy. For example, retail sales were down just 2.6% y-o-y in July, after reaching a bottom in April (-23.2%). Although paid services slumped 25.5% y-o-y in July, this still marked a considerable improvement from May, when they tanked 38.9% y-o-y. The recovery in the services sector will be sluggish given the anti-Covid measures that remain in place (especially in international tourism and entertainment). However, it appears that this situation is encouraging people to spend more money on goods, which is important for the retail sector, particularly as real disposable incomes have declined (down 8% y-o-y in 2Q20).
Significantly, wholesale trade has almost returned to pre-crisis levels and was down just 0.6% y-o-y in July. The government measures to support the economy appear to have been effective, and the economy is regaining momentum following the shock in March-April. This development is in line with our expectations, and we reiterate our forecast that GDP will shrink 4% this year. The country's ability to make up for the decline in 2020 in forthcoming years will depend on the global recovery, which will drive Russian exports of goods, including fuel - a segment suffering significantly from the global crisis.
43 ​RUSSIA Country Report​ October 2020 ​ ​www.intellinews.com