Page 5 - RusRPTJuly18

dramatically revised Russia’s economic statistics, after taking account of military industrial production that now paints the economy in a much rosier light, but unsettled analysts.
The ministry revisions take gross domestic product performance closer to levels promised by Economy Minister Maxim Oreshkin last year before the federal statistics service said GDP grew by only 1.5% in 2017, missing expectations. The Russian economy has likely expanded by about 2.0% in 2017, above the previously reported growth of 1.5%, the ministry said.
For example, Russia's industrial output rose 3.7% in May, compared to the same period of the last year, while analysts polled by Reuters had expected a 0.8% increase. The statistics agency has also revised and increased its growth estimate for previous months.
The sharp upward revision of industrial production series that surprised analysts was coupled with an unexpected dive in real income in May that caught analysts off guard. Retail trade expanded by 2.4%, indicating stable consumer demand that remains Russia's principal growth engine. Unemployment also fell to a new post-Soviet record-low of 4.7%.
But that made the stumble of real income, which dropped by 9% month-on-month in May and remained almost flat year-on-year inching up by 0.3%, an unexpected sharp decline from 4.4-5.7% y/y growth rate seen in previous months. Some analysts put the result down to a high base effect and say the fall is temporary.
The consensus is that the Russian economy will expand at around 1.7% a year , according to Russia’s the Higher School of Economics Development Centre latest Consensus Forecast, which aggregates projections for Russia’s economy from 22 professional forecasting organisations in Russia and abroad.
RUSSIA Country Report July 2018 www.intellinews.com