Rosstat has released its GDP breakdown by expenditures for 1Q12. The detailed breakdown reveals that in 1Q12 the growth in household consumption decelerated to 7.2% (from 7.7% YoY in 4Q11). Meanwhile, fixed capital investment increased more actively, at 15.0% YoY (compared with 13.2% YoY). The growth in capital formation (fixed capital investment plus inventories) slowed to 10.5% YoY (from 13.0% YoY). Exports added only 4.4% YoY (although that was a rebound from the 1.4% YoY in 4Q11), while imports climbed 10.2% YoY (decelerating from 14.9% YoY).
Given Rosstat’s data, we estimate that in 1Q12 the key drivers of the 4.9% YoY GDP growth were household consumption (+3.8pp) and fixed capital investments (+2.0pp). This is not a surprise as monthly data in 1Q12 pointed to robust growth in fixed capital investments (16.3% YoY) and in retail sales (7.5% YoY). One serious concern is that the contribution of net exports to real GDP growth was close to zero in 1Q12, as imports growth revived on RUB strengthening and surging incomes. Later this year we expect local demand growth to slow down due to pressure on RUB from CA which, coupled with lower investment growth on a moderation in bank lending to corporates underpins our full year forecast for real GDP growth at a 3.5% YoY in 2012.