Page 40 - RusRPTJun20

With most retail stores (except for grocery stores) closed due to quarantine in April, there were steep declines in the production of clothes (28% y/y) and leather and leather goods (45%).
Car production ​was down 60% y/y amid a drop in demand (most car showrooms were closed) and interruptions in deliveries of car components from abroad (many car factories in the EU and Asia were closed).
Metals ​and construction materials production also declined due to the drop in investment activity and the closure of many construction sites.
Analysts estimate that the full month of lockdown measures shaved around 0.7 pp from industrial production growth this year. Taking into account that the measures were in place nationwide for most of the first half of May as well, they expect to see another drop in industrial production in May, though the drop in manufacturing will probably be less steep, as economic activity has started to recover in the second half of the month.
At the same time, the new OPEC+ deal (in place since May 1) will result in a significant reduction in oil production (and thus mining and quarrying output), further depressing industrial output.
4.2​ Inflation
Consumer prices will continue growing throughout 2021, although changes in the CPI rate y/y will not be dramatic​. BCS GM forecast CPI at 4.2% y/y by YE20 and 4% y/y in December 2021. The main drivers for inflation include food (an uncertain harvest outlook increases the chance for a short period of seasonal deflation this year) and the base factor (4 month-long
40​ RUSSIA Country Report​ June 2020 ​ ​www.intellinews.com